UltraTech Cement shares rose as much as 6 percent on Friday after the company’s quarterly earnings beat estimates on all parameters during the June quarter.

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During an investor presentation, the cement maker said that demand momentum remains robust — as seen through services PMI, external trade, air traffic, and bank credit growth — even as cost pressure might persist. This supported the upbeat investor sentiment for the stock.

At 14:35 IST, shares of the Aditya Birla company were trading 4.4 percent higher at Rs 6,400.85 on the BSE.

Here’s a look at the company’s April-June quarter earnings:

Keeping in mind inflation has been a worry for the Street, the company's raw material cost fell to Rs 1,999.16 crore in the June quarter as compared to Rs 2,099.26 crore in the previous quarter. In the corresponding period last year, however, it consumed raw materials worth Rs 1,550.76 crore.

Even as the rising inflation pressure could weigh on the profitability of cement manufacturers, the strong momentum in the housing sector and the government’s infrastructure push could help the Indian cement industry to witness an upswing in demand in FY23.

Demand commentary

After a strong end to FY22, cement demand was impacted by overall inflationary trends and lower labour availability in May 2022. However, the company said demand picked up in June on pre-monsoon construction activity.

The cement company achieved capacity utilisation of 83 percent as against 73 percent during the first quarter of FY22. Domestic sales volume grew 19 percent on a year-on-year basis.

Capex plan

UltraTech Cement’s existing expansion programme is estimated to be completed by the end of FY23. The company said that work on capex announced during the quarter has commenced, and commercial production is expected to go on stream in a phased manner by FY25.

With the completion of the latest expansion round, UltraTech Cement's capacity will grow to 159.25 mtpa, reinforcing its position as the third-largest cement company in the world, outside of China, the firm said in its earnings press release.

First Published:Jul 22, 2022 2:58 PM IST