Aditya Birla Group company UltraTech Cement has reported a 37.8 percent year-on-year decline in consolidated profit due to one-time loss and lockdown impact on revenue but managed to beat analysts' estimates which was pegged at Rs 480 crore for the quarter.
The double other income to Rs 278.8 crore against Rs 134.7 crore YoY supported profitability during the quarter. Consolidated net profit in the corresponding period last year was at Rs 1,281.3 crore.
The stock price reacted positively to earnings, rising 5.45 percent to Rs 4,069.50 at 14:15 hours.
Consolidated revenue from operations fell 33.2 percent to Rs 7,633.8 crore compared to the year-ago period as sales volume plunged 22 percent to 14.65 million tonnes, hit by lockdown, but was ahead of the average of estimates of analysts polled by CNBC-TV18 which was pegged at Rs 7,450 crore for the quarter.
UltraTech booked a one-time loss of Rs 157.4 crore during the three months ended June 2020, upon receiving an order dated July 17 this year issued by the Supreme Court against the company's claim of capital investment subsidy, under Rajasthan Investment Promotion Scheme - 2003.
At the operating level, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 29.7 percent year-on-year to Rs 2,074.6 crore in Q1 FY21, but margin expanded to 27.2 percent during June quarter 2020 against 25.8 percent in June quarter 2019 due to cost control measures. Both came in ahead of CNBC-TV18 poll estimates of Rs 1,625 crore and 21.8 percent respectively for the quarter.
"The company's focus on operational efficiencies and cost control has made it better prepared for any future slowdown resulting from COVID-19," said UltraTech, adding 60 percent capacity utilisation was achieved in the 68 operating days available after the national lockdown during the first quarter of this financial year.
The company further said its focus on conserving cash continued unabated. "The 'overheads control programme' initiated by the management cut fixed costs by 21 percent YoY. Prudent working capital management and control on cash flows are reflected in a reduction of net debt by Rs 2,209 crore during Q1FY21."