In This Article:
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Capacity Utilization: 68% with a 3% growth in volume terms.
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Fuel Costs: Pet coke ratio increased to 54%; cost per kcal decreased to INR1.84 from INR2, an 8% decline QoQ.
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Expansion Plans: 8 million tonnes of capacity to be added in H2 FY25, reaching 157 million tonnes by fiscal '25 end; target of 184 million tonnes by FY27.
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Renewable Energy Capacity: Increased from 612 megawatts to 681 megawatts, aiming for 1.8 gigawatts by FY27.
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WHRS Capacity: Increased from 278 megawatts to 308 megawatts, targeting 450 megawatts by FY27.
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Clinker Conversion Ratio: On track to increase from 1.44 to 1.54 by FY27.
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Alternative Fuel Mix: Set to rise from 5% at the end of fiscal '24 to 15% by FY27.
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Current Capacity: 150.66 million tonnes, with a target of 159 million tonnes by March '25.
Release Date: October 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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UltraTech Cement Ltd (BOM:532538) reported a 3% growth in volume terms despite challenging conditions such as monsoons and pre-election slowdowns.
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The company is on track with its expansion projects, expecting to add 8 million tonnes of capacity in H2, reaching 157 million tonnes by the end of fiscal '25.
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Fuel costs have decreased, with pet coke ratios increasing to 54% and rupees per kcal dropping to INR1.84, an 8% decline QoQ.
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The company has a strong focus on efficiency improvement programs, including increasing WHRS and renewable energy capacities, which are expected to deliver cost savings.
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UltraTech Cement Ltd (BOM:532538) has a diversified presence across India, which helps mitigate regional market fluctuations and supports consistent brand positioning.
Negative Points
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Capacity utilization was at 68%, indicating underutilization due to external factors like intense monsoons.
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Employee costs saw a significant 24% QoQ increase due to one-time bonuses, impacting overall expenses.
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EBITDA per tonne is at a multi-year low, raising concerns about profitability amidst rising costs.
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The company faces potential indirect impacts from global events, such as increased ocean freight costs.
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There are ongoing regulatory processes for acquisitions, such as India Cements, which could delay integration and realization of synergies.
Q & A Highlights
Q: Could you provide an update on the expected fuel costs for Q3 and Q4? A: Atul Daga, CFO, stated that fuel costs should drop further. The company consumes around 3 million tonnes of fuel between coal and pet coke, and the fuel mix is crucial. Pet coke usage has increased significantly, which will continue to rise, leading to a further decrease in costs.