UltraTech Cement Q3 Results Review - Higher Utilisation Comforting; Profits To Improve: Motilal Oswal
UltraTech Cement reported consolidated Ebitda of Rs 23.4 billion and Ebitda/tonne of Rs 903.
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Motilal Oswal Report
UltraTech Cement Ltd. reported consolidated Ebitda of Rs 23.4 billion (estimated Rs 24.2 billion) and Ebitda/tonne of Rs 903 (estimated Rs 945).
Adjusted profit after tax stood at Rs 10.6 billion (down 10% YoY; 5% below our estimate). Lower-than-estimated realisation increase and unexpected increase in variable costs resulted in an earnings disappointment.
UltraTech Cement expects a strong demand environment and utilisation levels at 95-100% in Q4 (92% in Dec-22).
We had highlighted in our sector update that industry clinker utilisation levels should be at 89% in Q4, which ideally should drive up profits improvement for the industry.
We cut our FY24/FY25 earnings per share estimate by 5% (each). We are optimistic on the stock, given robust expansion plans, structural cost improvement (increasing green energy share and logistics cost optimisation) and strong balance-sheet (net-cash positive in FY25E).
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