UltraTech sees 7% growth in profit in first nine months

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Updated Tue, 27 Jan 2015 14:02:18 GMT

UltraTech Cement Limited achieved net sales of Rs.5490 crore in the quarter ended 31 December 2014, an increase of 15% y/y. Profit after tax for the first nine months was 7% up at Rs.1400 crore, while revenues in the same period increased by 16%. In all, the company sold 10.98 million t of cement and clinker in India and 3.16 lakh t of white cement and wall care putty.

Prices fell, but efficiency measures helped to contain costs, despite a rise in input and logistics costs. On a consolidated basis, profit before interest, depreciation and tax was Rs.1058 crore (up from Rs.928 crore) and profit after tax was Rs.401 crore (up from Rs.399 crore).

Going forward, UltraTech expects the business outlook to remain challenging. The company anticipates an 8% growth in demand in the long-term, driven by housing and infrastructure spends.

Acquisition of cement units of Jaiprakash Associates

The Board of UltraTech Cement had earlier approved the acquisition of the Bela and Sidhi operations of Jaiprakash Associates Limited – a capacity of 4.9 million tpy and 180 MW TPP. The company and JAL have entered into a definitive agreement for this acquisition which will propel the company’s cement capacity in India from ~60 mtpa to ~65 mtpa. With the company’s current projects under way, the capacity in India will stand raised to ~71 mtpa in 2016.

In exchange of the above business, the company shall issue non-convertible debentures worth Rs.4538 crore and non-convertible cumulative redeemable preference shares worth Rs.10 lakh. As part of the business, the company shall take over Rs.626.50 crores of debt and negative working capital of Rs.160.50 crores.

The transaction in subject to approvals and should close in 7 – 9 months.