UltraTech Cement’s Q2FY25 Earnings Take a Hit: Net Profit Plunges 36% Amid Revenue Downturn
India’s largest cement manufacturer, UltraTech Cement, reported a significant 36% decline in net profit for the quarter ended September (Q2FY25), primarily attributed to lower revenue from operations. The company’s financial performance was impacted despite steady domestic sales volume growth and strategic expansion initiatives.
UltraTech Cement’s net profit attributable to owners of the company stood at Rs 820 crore, marking a 36% year-over-year (YoY) decline from the same period last year. Revenue from operations slipped 2.4% to Rs 15,634.73 crore, falling short of analysts’ expectations. Prior to the earnings announcement, 16 analysts estimated a revenue of Rs 15,711 crore, while 18 analysts projected a net income adjusted of Rs 1,032 crore.
The company’s profit before interest, depreciation, and tax (PBIDT) decreased to Rs 2,239 crore from Rs 2,718 crore a year ago. However, domestic sales volume grew 3% YoY, despite challenging weather conditions, with incessant rain affecting operations throughout the country this season. Capacity utilization for the quarter was at 68%.
In terms of cost structure, UltraTech Cement saw a 14% fall in energy costs from a year ago, contributing to partial cost savings. Conversely, raw material costs rose 1% due to increased expenses on fly ash and slag.
expenses on fly ash and slag.
Looking ahead, UltraTech Cement is poised for significant capacity expansion. With ongoing projects slated for completion by FY27 and statutory approvals received for acquiring Kesoram Cement (10.75 MTPA) and India Cements (14.45 MTPA), the company’s total cement capacity is expected to surpass 200 MTPA.
The Indian cement industry faces challenges from climate-related disruptions and fluctuating raw material costs. However, UltraTech Cement’s strategic expansion and focus on operational efficiency position the company for long-term growth.
The company’s expansion plans and acquisitions are expected to bolster its market presence, enabling it to capitalize on growing demand in the Indian cement market.
