Q2 Results: UltraTech’s Profit Misses Estimates As Extended Monsoon Weighs On Demand
The cement maker’s profit rose but failed to meet analysts’ estimates as the monsoon and floods across India impacted demand.
UltraTech Cement Ltd.’s quarterly profit rose but failed to meet analysts’ estimates as the monsoon and floods across India impacted demand.
Net profit rose 72.3 percent over last year to Rs 639.20 crore in the quarter ended September, according to the Aditya Birla Group company’s exchange filing. That’s lower than the Rs 805.1-crore consensus estimate of analysts polled by Bloomberg.
Revenue rose 4.3 percent over last year to Rs 9,253.8 crore. Analysts had expected the metric at Rs 8,750.5 crore. Volumes dropped 1 percent year-on-year to 17.2 million tonnes.
Earnings before interest, tax, depreciation, and amortisation rose 29.2 percent year-on-year to Rs 1,812.55 crore. That’s lower than the analysts’ estimate of Rs 1,887 crore. Operating margin expanded 380 basis points to 19.6 percent.
“The quarter witnessed depressed cement demand on account of extended monsoon and heavy floods in almost all parts of the country,” the company said in a statement accompanying the filing.
The cement industry is expected to post robust earnings growth going ahead with volumes and prices likely to recover in the second half of the financial year ending 2020 as well as continued benefits of low fuel cost, Edelweiss said in a research report prior to the earnings. “ We foresee a favourable demand outlook (for cement industry) over the medium-to-long term, high industry clinker utilisation and a low fuel cost trend.”
Shares of the company closed 0.8 percent higher on Friday. The stock declined 4.1 percent in the September quarter compared with the NSE Nifty Index’s 3.3 percent fall.