UltraTech Q3 net marginally down at Rs364 cr despite 15% rise in PBT, sales

Aditya Birla group company UltraTech Cement has reported a marginal fall in its net profit (after tax) for the quarter ended 31 December 2014 at Rs364 crore compared to Rs370 crore for the quarter ended 31 December 2013. 

Profit before interest, depreciation and tax for Q3 of 2014-15, however, stood 14.58 per cent higher at Rs990 crore, compared to Rs864 crore for the October-December 2013 quarter.

Net sales at Rs5,490 crore have increased by 15 per cent over the Rs4,783 crore reported in the comparable period of the previous year

For the first 9 months of the financial year, Ultra Tech said its revenues have jumped 16 per cent to Rs16,521 crore and net profit has risen by 7 per cent to Rs1,400 crore.

The combined domestic cement and clinker sales stood at 10.98 million tonnes (9.98 million tonnes in the previous year quarter) and 3.16 lakh tonnes (2.89 lakh tonnes) for white cement and wall care putty.

UktraTech said while cement prices witnessed a downward trend on a sequential basis, the ongoing cost optimisation measures helped the company in containing costs despite the continuing increase in price of input material and logistics cost.

On a consolidated basis, net sales stood at Rs5,835 crore compared to Rs5,137 crore in the corresponding period of the previous year. Profit before interest, depreciation and tax stood at Rs1,058 crore and profit after tax at Rs401 crore vis-a-vis Rs 928 crore and Rs399 crore, respectively.

Earlier during the quarter, the board of UltraTech had approved the acquisition of the cement business of Jaiprakash Associates Limited situated at Bela and Sidhi in Madhya Pradesh, having a capacity of 4.9 mtpa together with 180 MW TPP.

The company and JAL have entered into a definitive agreement for this acquisition, which will propel the company's cement capacity in India from 60 mtpa to 65 mtpa.

With the company's current projects underway, the capacity in India will stand raised to 71 mtpa in 2016.

As part of the business transaction, Ultratech said it would issue non-convertible debentures worth Rs4,538 crore and non-convertible cumulative redeemable preference shares worth Rs10 lakhs. The company will also take over Rs626.50 crore of debt and negative working capital of Rs160.50 crore.

The transaction, however, is subject to the approval of shareholders and creditors, sanction of the scheme of arrangement by the high courts, approval of the Competition Commission of India and other statutory approvals. It is anticipated that the transaction will close in 7 to 9 months.

Standard Chartered Bank and Moelis & Company India Pvt Ltd are the transaction advisors and the valuation was carried out by chartered accountants Bansi S Mehta & Co, J M Financial Institutional Securities Limited provided the independent fairness opinion to the company. Amarchand & Mangaldas & Suresh A Shroff & Co acted as the legal advisor.

UltraTech said business outlook continued to remain challenging with a long-term demand growth for cement to be around 8 per cent and that the key demand drivers will continue to be housing and infrastructure spends.

With the company's current projects underway, the capacity in India will stand raised to 71 mtpa in 2016, it added.