By Hritam Mukherjee
BENGALURU (Reuters) -UltraTech Cement, India’s largest cement maker by capacity, topped fourth-quarter profit estimates on Monday on strong sales volumes but said it expects demand to moderate in the current fiscal year.
“There might be some moderation in cement demand in FY25, but expect it to be of lesser duration than in the past,” said Finance Chief Atul Daga in a post-earnings call.
Analysts have been expecting subdued demand in the first half of the fiscal 2025 due to slowdown in construction activity amid the general elections and a likely healthy monsoon.
The world’s largest election started on April 19 and will span over six weeks until June.
UltraTech’s consolidated net profit rose 35.5% to 22.58 billion rupees ($270.5 million) in the quarter ended March, as lower cement prices boosted sales. Analysts, on average, expected profit of 20.80 billion rupees.
This is the company’s highest quarterly profit in two years.
Cement prices dropped 5% sequentially to hit a two-year-low in the reported quarter, as cement companies doled out discounts to meet their fiscal year-end volume targets and stave off tough competition in a seasonally strong quarter.
Cement prices in the country are not expected to go down further, Daga said.
UltraTech’s sales volumes increased 11% in the fourth quarter across India, within the 9%-12% growth range estimated by analysts.
That helped drive the Aditya Birla Group company’s revenue from operations up 9.4% to 204.19 billion rupees – the highest since at least the June quarter of fiscal 2014. Analysts expected revenue at 200.64 billion rupees.
Indian cement makers have benefitted from strong infrastructure and property sector demand in the past few quarters.
Meanwhile, a rise in freight and input costs drove total expenses 6.7% higher.
Strong sales volume also helped smaller peers Dalmia Bharat and ACC to report better-than-expected fourth-quarter profits.
UltraTech’s shares ended 2.7% higher on the day.
($1 = 83.4718 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Eileen Soreng)
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