UltraTech grows 21 per cent

UltraTech Cement Limited, today announced its unaudited financial results, for the quarter ended 30 September 2018.

Financials
Net sales have soared 20 per cent to Rs.8,111 crore from Rs.6,752 crore over the previous year. Profit before Interest, Depreciation and Tax (PBIDT) was Rs.1,447 crore vis-à-vis Rs.1,550 crore in the corresponding period of the previous year.

Domestic sales volume jumped 21 per cent over Q2FY18. However, rising energy and logistics cost, coupled with rupee depreciation, resulted in costs increasing by 14 per cent as compared to Q2FY18, bringing down profits as compared to the previous year.

Corporate development
The Scheme of Arrangement amongst Century Textiles and Industries Limited (“Century”), the Company and their respective shareholders and creditors (“the Scheme”), which was earlier approved by the Board of Directors, has since received the approval of the stock exchanges and the Competition Commission of India. The Scheme is now subject to the approval of shareholders, the National Company Law Tribunal and other regulatory authorities, as may be required.

In terms of the Scheme, Century will demerge its cement business into the Company. Century’s cement business consists of 3 integrated cement units in Madhya Pradesh, Chhattisgarh and Maharashtra and a grinding unit in West Bengal. In terms of the Scheme, the Company will issue 1 (one) equity share of face value Rs.10/- each for every 8 (eight) equity shares of Century of face value Rs.10/- each to the shareholders of Century.

This gives an opportunity to the shareholders of Century to stay invested in pure play cement and have the advantage of higher value appreciation with UltraTech as compared to their investment in Century. Given UltraTech’s track record of completing transactions and turning the assets around, this transaction helps Century deleverage and focus on their future plans.

Upon completing the acquisition of Century’s cement business and with the on-going capacity expansions, the Company's cement manufacturing capacity will stand augmented to 111.1 MTPA, including its overseas capacity.

Acquired assets
The Company has successfully completed the integration of 21.2 MTPA cement capacity acquired in July 2017. As the next phase of improvement, it is now proposed to look at further investments in WHRS systems at these plants.

Outlook
Demand is witnessing an upward movement with higher spends on infrastructure and government sponsored housing program. With the additional capacities acquired by the Company through the organic and inorganic route and its rapid ramp-up, UltraTech is very well placed to participate in the growth of the economy.