Higher cement prices help India's UltraTech beat earnings estimates
Consolidated net profit, including gains from its India Cements (ICMN.NS), opens new tab deal in 2024, was 22.26 billion rupees ($258.11 million) - above the 21.56 billion rupees estimated by analysts, on average, according to data compiled by LSEG.
Standalone net profit for the three months ended June 30 was up 48% on-year.
Cement prices rose about 2% on-year on average in the quarter, according to brokerage Ambit Capital, extending the steady recovery so far this year after last year's slump.
Finance chief Atul Daga said in a post-earnings call that cement prices have continued to improve in July, especially in the South Indian markets, which emerged out of a long pricing lull in April.
"Prices have (been) favorably poised in spite of heavy monsoons," Daga said.
The company reported a revenue of 212.75 billion rupees, surpassing analysts' estimates of 200.12 billion rupees. However, its consolidated sales volume growth of 9.7% was near the lower side of the 9.6%-17.5% growth range projected by four brokerages.
Heavy rains dampened demand in Maharashtra, Gujarat and Odisha, while geopolitical tensions stalled construction activity in India's northern border states, the company said.
India and Pakistan saw their worst clashes in decades in the quarter, following a deadly attack in Indian Kashmir in April. The April-June period is also a seasonally soft quarter for cement companies, as monsoon showers slow construction.
The company's dealmaking, such as the acquisition of India Cements and Kesoram's cement business, helped in capacity expansion and shielded its volumes from weather-led volatility, analysts have said.
UltraTech shares closed 0.5% higher.
($1 = 86.2425 Indian rupees)
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