UltraTech Cement Q1 Review - Higher Prices Offset Cost Increase: Centrum Broking


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UltraTech Cement Ltd. reported better‐than‐expected Ebitda of Rs 29.3 billion (our estimate: Rs 26.6 billion), flat QoQ despite cost pressure and lower volume.

UltraTech Cement’s grey cement realisation of Rs 5,404/tonne, up Rs 355/tonne (~7%) QoQ (higher than industry increase of ~3% QoQ) offset higher fuel cost and lower volume.

As a result, Ebitda/tonne, at Rs 1,216, was up 9.7% (Rs 107/tonne) QoQ. We note that UltraTech Cement’s realisation (higher increase) and fuel cost (lower increase) was better than its peers.

Fuel cost is expected to rise further coupled with lower cement prices, keeping pressure on margins in Q2 FY23. However, it is expected to bottom out there.

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