UltraTech Cement - Q2FY21 First Cut - ICICI Securities

(CMP: Rs. 4,620; MCap: Rs. 1,33.400 crore)

UltraTech Cement reported good set of numbers for Q2FY21. Better than expected sales volumes along with cost control measures helped the company to report far better EBITDA than estimated levels.

Q2FY21 Earnings Summary

- Standalone revenues for the quarter stood at Rs. 10,019 crores (vs. I-Direct estimates of Rs. 9,513 crore). Sales volume remained ahead of our estimates at 19.2MT (up 8.2% YoY, 37.8% QoQ) while the realisations remained in line with our estimates at 5,215/t (vs I-direct estimate: 5,231/t. It declined by 1.4% QoQ. Overall blended cement sales were at 71% (up 3% YoY) led by increase in the rural penetration

- On the profitability front, EBITDA margins expanded by 592 bps YoY to 25.5% that remained ahead of I-direct estimated EBITDA margins of 24.1%. Better realisations and reduced production cost (down 6% YoY) on per tonne basis helped the company to achieve better margins

- On absolute basis, the company reported EBITDA of Rs. 2552 crore (up 40.8% YoY) vs. I-direct estimates of Rs. 2291 crore while EBITDA/t for the quarter stood at Rs. 1329/t (vs I-direct estimate of Rs. 1260/t). PAT growth of 89% YoY to Rs. 1209 crore is mainly attributable to improved sales volumes along with reduced cost structure

- On the leverage front, the company with its prudence and deft financial management has successfully reduced its Net Debt / EBITDA ratio to 1.1x from 2.0x last year. On absolute basis, the net debt for the year is reduced from Rs. 14,651 crore to Rs. 12,132 crore

The company's strong quarterly performance is on the back of operational efficiencies and its ability to serve all India markets. With prudent working capital management, and overall efficient operations, the Company has shaved off Rs. 4,728 crores of net debt in the first half of this fiscal year. On the M&A front, The 14.6 MTPA cement plants acquired during the previous financial year have been integrated and now the company is investing in improving operations further. Work on the Company's 3.4 MTPA cement capacity addition in Odisha, Bihar and West Bengal has picked up pace and are expected to get commissioned during FY22, in a phased manner.

We would be coming out with a detailed report soon.

Shares of ULTRATECH CEMENT LTD. was last trading in BSE at Rs.4629.6 as compared to the previous close of Rs. 4547.4. The total number of shares traded during the day was 50704 in over 8926 trades.

The stock hit an intraday high of Rs. 4656.9 and intraday low of 4439.5. The net turnover during the day was Rs. 231911711.

Source : Equity Bulls

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