Aditya Birla Group company UltraTech Cement has reported a 113 percent YoY increase in Q2FY21 consolidated net profit largely due to the sale of its Chinese subsidiary.
Consolidated profit surged to Rs 1,235 crore in the quarter ended September 2020 from Rs 579 crore in the same period last year.
The company reported an exceptional loss of Rs 335.73 crore, including an impairment provision of Rs 57.92 crore, towards old advances for purchase of certain land and impairment provision of Rs 271.18 crore which has been made on a loan receivable (asset held for sale).
Also, there was an exceptional gain of Rs 359.87 crore on account of sale of Chinese subsidiary. "UltraTech Nathdwara Cement (UNCL) through its subsidiary, Krishna Holdings, a company incorporated in Singapore has completed the divestment of its entire equity shareholding of 92.5 percent in its cement subsidiary at a net consideration of $94.70 million. Further, in respect of another step-down subsidiary of UNCL which is held for sale, the company has evaluated the carrying value based on an independent valuation report and recorded a net gain of Rs 359.87 crores on sale/remeasurement of discontinued operations.
"All the above items put together constitute an exceptional gain (net) of Rs 24.14 crore during the three months ended September 2020 and exceptional loss (net) of Rs 133.23 crore during the six months ended September 2020," UltraTech Cement said.
Consolidated revenue grew by 7.7 percent year-on-year to Rs 10,354 crore with volume growth at 18 percent YoY for September quarter 2020.
"The company's strong quarterly performance is on the back of operational efficiencies and its ability to serve all India markets. UltraTech reported robust operating margins driven by both revenue growth and tight cost management," the company said in its BSE filing.
On the operating front, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) surged 40.4 percent YoY to Rs 2,695 crore and margin expanded 600 bps to 26 percent in Q2FY21.
Earnings were ahead of analysts' estimates. A CNBC-TV18 poll had estimated profit at Rs 895 crore on revenue of Rs 9,750 crore and EBITDA was expected at Rs 2,137 crore with the margin at 21.92 percent.
For the second quarter in a row, the company reduced net debt substantially. "With prudent working capital management, and overall efficient operations, the company has shaved off Rs 4,728 crores of net debt in the first-half of this fiscal year," it said.The stock climbed 1.81 percent to close at Rs 4,629.60 on the BSE.