UltraTech Cement - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 6,487; MCap: Rs. 1,87,102 crore)

UltraTech Cement reported healthy set of numbers for Q4FY21. Better than expected sales volumes along with controlled costs helped the company to achieve better than expected operating results.

Q4FY21 Earnings Summary

- Standalone revenues increased by 34.8% YoY to Rs. 13,966 crore (vs. I-Direct est: Rs. 12,917 crore). Blended Sales volume were up by 29.6% YoY (16.5% QoQ) to 26.6MT (vs I-direct est: 24.9MT). Capacity utilisation crossed over 93% for the quarter. Realisations also remained firm that were up 4% YoY (up 1.3% QoQ) to Rs. 5252/t (vs I-direct est: Rs. 5180/t)

- On the profitability front, EBITDA margins expanded by 331bps YoY to 25.2% that remained ahead of I-direct estimated EBITDA margins of 23.5%. Better asset utilizations and reduction in the fixed overheads kept the cost of production under control on per tonne basis that helped the company to achieve better margins

- On absolute basis, the company reported EBITDA of Rs. 3,512 crore (up 55.3% YoY) vs. I-direct estimates of Rs. 3,037 crore while EBITDA/t for the quarter stood at Rs. 1,321/t (vs I-direct est of Rs. 1,218/t). PAT improved by 14.7% QoQ to Rs. 1,778 crore. It was down by 38.8% YoY mainly as last year PAT were higher by Rs. 1803 crore due to reversal of deferred tax liability

- On the leverage front, the company has successfully reduced its Net Debt / EBITDA ratio to 0.55x from 1.72x last year and 0.84x last quarter. On absolute basis, the net debt for the year is reduced from Rs. 16,981 crore in Mar-20 to Rs. 6,717 crore as of Mar-20. The board has recommended dividend of Rs. 37/share

The Board had earlier sanctioned capacity expansion plans of 19.5MT through a mix of brown field and green field expansion. The additional capacity is being created in the fast-growing markets of the east, central and north regions of the country. Commercial production from these capacities is expected to go on stream in a phased manner, during FY22 and FY23. While rural and semi-urban housing continue to drive growth, pick-up in government led infrastructure aided incremental cement demand. Pent-up urban demand is also expected to improve. The Company is closely monitoring the impact of the second wave of the pandemic on its operations. With its focus on operational efficiencies and strong balance sheet, the company is now in better position to withstand any near term slowdown in the demand.

Shares of ULTRATECH CEMENT LTD. was last trading in BSE at Rs.6484.8 as compared to the previous close of Rs. 6406.2. The total number of shares traded during the day was 26919 in over 4261 trades.

The stock hit an intraday high of Rs. 6521.95 and intraday low of 6421.45. The net turnover during the day was Rs. 174506577.

Source : Equity Bulls

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