UltraTech Shares Poised for a Rally after Strong Q4 Earnings Show

UltraTech Cement shares are poised to capture market spotlight on April 29 as the cement giant posted a strong fourth-quarter performance that exceeded analyst expectations, with impressive revenue growth that could likely cement investor confidence in the company despite everal macro-economic and sector-specific headwinds.

The stock opened 0.7% higher during the pre-open session on the National Stock Exchange. It has risen nearly 7% this year and is just 1% lower than its 52-week low mark.

The Aditya Birla group flagship company posted a 10% growth in its consolidated net profit, which was boosted by 17% volume push, including those of Kesoram and India Cements. Even an aggregate 15% increase in the company’s input costs, depreciation and amortisation costs, power and fuel expense, freight and forwarding expense and other expenses could not offset the impact of 13% growth in the revenue.

The cement maker’s domestic EBITDA per tonne, a key metric to measure profitability, rose by Rs 84 per tonne on year during the March quarter. However, the company's sales realisation remained on the tepid end with only 1.6% sequential growth due to sluggish pricing activity amid intense competition for market share between UltraTech and biggest rival Adani Cement, according to the company’s investor presentation. On a year-on-year basis, its sales realisation fell over 2%.

For FY25, UltraTech's consolidated revenue grew over 7% on year, while its net profit slid 14%, primarily due to increased interest costs and depreciation, the cement-maker cited. The Adita Birla group company sees 7-8% volume growth in the cement industry going ahead, and the company adding 27.1 million tonnes per annum of capacity by FY27. Most of the capacity addition is expected in the eastern and southern markets.

However, not everything is going good for the company here. Chief Financial Officer of UltraTech, Atul Daga, said that the company has seen some slowdown in the beginning of the ongoing quarter due to the heatwave. "Urban real estate demand showing signs of a slowdown. We expect phenomenon to be temporary. Short term demand slowdown outlook only due to heat wave," he said in the post-earnings investor call. Despite these headwinds, the company expects to grow in double digits in this year.