UltraTech Cement, India’s largest cement producer, reported a sharp 36% decline in its net profit for the second quarter of FY25, largely due to the prolonged monsoon season, delays in infrastructure projects, and labor shortages. The company’s consolidated net profit for the July-September period dropped to ₹820 crore, down from ₹1,280 crore a year earlier, missing market expectations. Revenue from operations also fell by 2.3% year-on-year, reaching ₹15,635 crore compared to ₹16,012 crore in the same quarter last year.
During the quarter, domestic grey cement sales volumes saw modest year-on-year growth of 3%, reaching 25.75 million tonnes. However, this represented a 15% decline from the previous quarter (April-June), which was affected by extreme heat, the General Elections, and labor shortages. These factors, combined with the monsoon impact, weighed heavily on UltraTech’s Q2 performance. The company’s EBITDA stood at ₹2,239 crore, down 18% from the previous year. Operating margins also shrank to 13%, compared to 16% a year earlier, reflecting the impact of weaker price realizations and higher costs.
A major challenge for UltraTech was the continued drop in domestic grey cement price realizations. The company’s average realization per tonne fell to ₹4,901, down from ₹5,349 in the same period last year and ₹5,045 in the April-June quarter. This decline, driven by infrastructure delays and the extended monsoon season, significantly impacted the company’s profitability. Analysts expect a meaningful recovery in cement prices only in the second half of the next financial year.
Despite strong stock performance over the past year, with gains exceeding 30%, UltraTech’s shares fell 2% after the Q2 results, trading at ₹10,874.45 on the NSE. Analysts believe the company’s performance could improve as infrastructure projects resume post-monsoon and cement prices stabilize, but the near-term outlook remains clouded by lower demand, unsuccessful price hikes, and weaker realizations.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial advice or an offer to buy or sell any securities. Investors should conduct their own research or consult with a qualified financial advisor before making investment decisions. The performance data mentioned is historical and does not guarantee future results. The company’s stock performance and projections are subject to market risks and various other factors that may affect financial outcomes.
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