Aditya Birla group firm UltraTech Cement on Wednesday reported 42.09 per cent fall in its consolidated net profit at Rs 758.70 crore for the second quarter of FY23, citing higher operating costs due to inflationary headwinds.
The company had posted a net profit of Rs 1,310.34 crore in the July-September period a year ago, UltraTech Cement said in a BSE filing.
Its revenue from operations rose 15.61 per cent to Rs 13,892.69 crore during the quarter under review as against Rs 12,016.78 crore in the corresponding period of the last fiscal.
UltraTech's "operating margin dropped significantly to 14 per cent mainly on account of higher energy costs, which increased by 58 per cent YoY and decline in realisation", the cement maker said in its earnings statement.
The operating cost of the company has also increased.
During the July-September quarter, UltraTech's "energy cost increased 58 per cent and the raw material cost rose 18 per cent YoY," it said.
Raw materials such as fly ash, slag and gypsum had an "inflationary increase in cost due to monsoon", while the cost of blended fuel and Petcoke consumption was up, said the Aditya Birla group firm.
UltraTech's total expenses were at Rs 12,934.27 crore, up 26.68 per cent in Q2/ FY23, as against Rs 10,209.43 crore.
In Q2/FY23 UltraTech's consolidated sales volume was 23.10 million metric tonnes during the quarter, registering a 7 per cent growth year-on-year.
UltraTech's domestic sales volume "grew 9.6 per cent on a year-on-year basis, despite heavy monsoons" through the quarter, it added.
UltraTech, which has a consolidated grey cement capacity of 121.25 MTPA (million tonnes per annum), increased its capacity utilisation. It achieved "capacity utilisation of 76 per cent as against 71 per cent during Q2FY22," the statement said.
Updating the capital expenditure, UltraTech said its first phase of growth launched in December 2020 is on track and estimated to be completed by the end of FY23.
"In the second half of this year, the company will commission another 15.4 MTPA of greenfield/brownfield expansion and start the next financial year with a capacity of 131.25 MTPA in India. Work on the second phase of growth of 22.6 MTPA announced during the first quarter has already commenced," it said.
Main plant orders have been placed and civil work started at some sites. Commercial production from these new capacities is expected to go on stream in a phased manner by FY25, and upon completion, its capacity will grow to 159.25 MTPA, it added.
On the outlook, UltraTech said given the government's focus on infrastructure spending and affordable housing, the cement sector's long-term growth potential continues to remain healthy.
"Demand revival is imminent, especially during the festive season and the January-March peak construction period," the company said.
Shares of UltraTech Cement Ltd closed at Rs 6,397.55 on BSE on Wednesday, up 0.89 per cent from the previous close.