UltraTech Cement's Q2 net profit rose 69 % to Rs 1,280 crore due to higher demand.

Updated - October 19, 2023, at 8:53 p.m.

Mumbai, October 19.

The Aditya Birla Group's UltraTech Cement reported a 69 percent rise in third-quarter net profit to 12.8 billion rupees (about $172 million) from 7.59 billion rupees (about $102 million) in the same period last year. The increase in profit was due to higher sales volume and lower costs. Total revenue was 161.79 billion rupees (about US$2.18 billion), up 15 percent from a year earlier. Expenditures rose 12 percent to 144.93 billion rupees (about 1.95 billion U.S. dollars). Sales volume increased 16 percent to 26.69 million tons. The sales value remained at Rs 267 per 50 kg bag compared to last year.

Cement consumption has maintained a positive trend across all sectors, supported by government infrastructure programs, rural development and urban development, the company said.

UltraTech achieved a capacity utilization of 75 percent during the third quarter, driven by capacity expansion. Energy costs decreased by 10 percent and raw material costs increased by 4 percent due to higher cost of fly ash and bottom ash.

The company has commissioned a production capacity of 5.5 million tons in the current fiscal year, after increasing production capacity by 12.4 million tons in fiscal 2023.

The company also implemented a 30 MW waste heat recovery system (WHRS) during the third quarter. Green energy now accounts for 22 percent of total energy consumption, thanks to 262 MW of WHRS and 429 MW of renewable energy.

Work is underway on the second phase of a 22.6 million-ton capacity expansion. The project will add an additional 1.8 million tons of slag grinding capacity, bringing total Phase II capacity to 24.4 million tons. Commercial production from the new capacity is scheduled to commence in phases by the fiscal year 2025.

A subsidiary of Star Cement Co has announced the signing of a cooperation agreement with Cemex UAE. The partnership aims to recycle concrete waste in the construction industry and improve the overall environmental performance of construction projects. Cemex will also provide Star Cement with low-carbon by-products, helping to reduce the construction industry's carbon footprint.

The company said a recovery in demand seems inevitable, especially during the holiday season and the busy construction period from January to March. Demand will also be supported by pre-election spending, continued government stimulus for infrastructure development and steady real estate development.

The company's shares rose 3 percent to Rs 8,515 on Thursday.