UltraTech Cement - Q1FY22 First Cut - ICICI Direct

(CMP: Rs. 7,371; MCap: Rs. 2.13 lakh crore)

UltraTech Cement surprised positively on the margin front during Q1FY22 leading to better than estimated EBITDA and net profit for the quarter.

Q1FY22 Earnings Summary

- Net revenues remained marginally better than our estimates at Rs. 11,477 crore (down 17.8% QoQ; I-Direct estimate - Rs. 11,424 crore). Domestic sales volumes for the quarter were at 20.5MT (down 22.8% QoQ) while blended realisations were higher by 6.4% QoQ to Rs. 5,590/tonne, up 5.7% YoY

- Reported EBITDA in Q1FY22 was at Rs. 3,172 crore, with EBITDA margins coming in at 27.6% (up 249 bps QoQ) - against our estimate of 25.6%

- Cost of production remained higher by 2.9% QoQ to Rs. 4045/t. However, EBITDA/t improved sequentially by 17% to Rs. 1545/t (vs I-direct estimate: Rs. 1,375/t) on back of higher realisations

- Absolute EBITDA declined by 9.7% QoQ to Rs. 3,172 crore. Though, the same remained better than our estimated EBITDA of Rs. 2921 crore

- Consequently reported PAT of Rs. 1,681 crore were also higher than our expectation of Rs. 1,457 crore

The second wave of Covid-19 impacted domestic cement consumption in rural/urban areas alike. With gradual ease of lockdowns since June 2021, the construction activities are treading towards normalcy. Further, Rural Housing is seeing a gradual recovery supported by the higher MSP for Kharif crop, increased procurement by Government agencies and improved food grain production in Rabi harvest which bodes well for the strong demand growth going forward.

We would be coming out with a detailed report soon.

Shares of ULTRATECH CEMENT LTD. was last trading in BSE at Rs. 7459.85 as compared to the previous close of Rs. 7423.2. The total number of shares traded during the day was 29389 in over 5276 trades.

The stock hit an intraday high of Rs. 7544.95 and intraday low of 7296.65. The net turnover during the day was Rs. 218641875.

Source : Equity Bulls

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