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Motilal Oswal Report
UltraTech Cement Ltd. beat the street and our Ebitda estimate, led by higher sales volumes and better cost management (standalone variable cost increased by Rs 135/tonne versus our estimate of Rs 210/tonne).
Consolidated Ebitda stood at Rs 31 billion (versus Bloomberg/our estimate of Rs 25.7-28 billion/Rs 28 billion).
Operating profit margin stood at 20.4% (our estimate: 19.2%). Adjusted profit after tax stood at Rs 16 billion (our estimate: Rs 14 billion).
Given the better demand scenario, UltraTech Cement remained optimistic about the industry’s long-term growth prospects.
Though there could be a fall in margin in Q2 due to lower cement prices (June-exit price down 3-5% versus Q1 FY23 average) and cost inflation (full impact of higher energy prices), we expect margin to gradually recover from Q3 FY23.
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