UltraTech Cement Limited announces financial results for quarter ended 30 September 2021

COVID-19

The second wave of COVID-19 looks to be receding almost as quickly as it was rising. Nevertheless, UltraTech continues to closely monitor the situation and the impact on its operations, while according utmost primacy to the safety and well-being of its employees and business partners.

Financials

Consolidated Net Sales were Rs.11 743 crores vis-à-vis Rs. 10 264 crores over the corresponding period of the previous year. Profit before interest, depreciation and tax was Rs. 2855 crores compared to Rs. 2833 crores. Profit before tax was Rs. 1947 crores and Profit after tax was Rs. 1314 crores compared to Rs. 1733 crores and Rs. 1309 crores, respectively.

Operations

Coal and Pet coke prices nearly doubled in Q2FY22 resulting in energy cost rising 17% YoY. The resulting impact on the company’s operations were partly offset by reduction in power consumption and continuing focus on operational efficiencies. The company expects to commence mining operations at its Bicharpur coal block situated in Madhya Pradesh, during Q3FY22 which will help in reducing the dependence on coal purchases.

During the quarter the company has commissioned 12MW of WHRS and 21MW of solar power. With this expansion the company’s green energy share has gone up to 15%.

CAPEX

UltraTech commissioned cement capacity of 1.2 mtpy in October 2021 at the following locations, which is the 1st phase of the 19.5 mtpy capacity expansion announced in December 2020:

• Patliputra Cement Works, Bihar – Additional cement capacity of 0.6 mtpy has been commissioned, taking the Unit’s capacity to 2.5 mtpa.
• Dankuni Cement Works, West Bengal – Additional cement capacity of 0.6 mtpy has been commissioned, taking the unit’s capacity to 2.2 mtpy. This additional capacity will help UltraTech to service the fast-growing cement demand in the Eastern markets.
• UltraTech’s total cement manufacturing capacity in India has now increased to 112.55 mtpy.

Sustainability

UltraTech announced its commitment to Climate Group’s RE100 initiative at Climate Week NYC 2021. As part of this commitment, UltraTech targets to meet 100% of its electricity requirement through renewable sources by 2050. RE100, led by Climate Group in partnership with CDP, brings together the world’s most influential businesses committed to 100% renewable electricity.

In the last two years, UltraTech has scaled up its contracted renewable energy capacity by 2.5 times. It has already set a target to scale up its green energy mix to 34% of its total power requirement by 2024, from the current levels of 13%. The commitment to move to 100% renewable energy to meet its electrical energy requirements by 2050 is both a reflection of its confidence on the progress made, as well as its resolve to overcome the challenges ahead. The RE100 announcement is in line with UltraTech’s focus to institutionalise its carbon reduction initiatives through measurable targets and commitments.

Outlook

Recovery in rural housing, higher MSP (minimum support price) for kharif crop; improved food grain production in rabi harvest; a third consecutive normal monsoon and pick-up in infrastructure-led construction activity are likely to drive cement demand off-take. Continuous increases in input costs like coal, pet coke and diesel pose a challenge for the industry.

UltraTech is confident of weathering the storm of increase in prices of coal, diesel and other inputs, with its sustainable efficiency improvement programmes, accompanied by increase in selling prices to absorb the increase in costs.

Read the article online at: https://www.worldcement.com/asia-pacific-rim/19102021/ultratech-cement-limited-announces-financial-results-for-quarter-ended-30-september-2021/