India: UltraTech Cement Q4 net rises 15% on cost controls

Byrebecca3360

Updated Thu, 24 Apr 2014 17:08:51 GMT

UltraTech Cement Ltd reported a forecast-beating 15 per cent rise in net profit for the January-March quarter as India's largest cement maker kept a lid on rising costs.

Increasing input and energy costs have put pressure on margins at cement companies while demand remains a concern in an economy where growth has almost halved to below 5 per cent in the past two years.

"Optimisation of fuel mix and other initiatives helped in maintaining costs almost at the previous year levels," UltraTech, part of the $40 billion Aditya Birla Group, said in a statement to the stock exchange on Wednesday.

UltraTech also said it had earmarked Rs. 10,000 crore to set up grinding units, cement terminals and other capital expenditures as part of its current round of expansions.

The company reported a net profit of Rs. 840 crore for the quarter ended March 31, beating market estimates of Rs. 650 crore, according to Thomson Reuters I/B/E/S. Net sales rose 9 per cent to Rs. 5,830 crore.

Consolidation in the Indian cement industry has been rife over the last few quarters with debt-laden companies like Jaiprakash Associates selling assets to deleverage their balance sheet, and analysts expect this trend to continue in the coming quarters.

UltraTech, which bought Jaiprakash's 4.8 million tonne cement plant for Rs. 3,800 crore late last year, plans to increase its production capacity to 70 million tonnes by 2015 from about 57 million tonnes at present.