Ultratech Cement Ltd (UTCL) Q2FY10 net profit at Rs2.51 bn (up 53% yoy) is below our expectation (Rs2.75 bn), primarily on account of higher than freight & fuel cost. Revenues for the quarter increased by 8.7% yoy to Rs15.41 bn on the back of volumes (+by 3.9%) increase to 4.16 mt and realizations (+4.7% yoy) to Rs3704/ton. Though on sequential basis, domestic cement realization per tonne seems to have increased by Rs 70 per tonne, the net plant realization (excluding freight) seems to have declined by Rs 45/tonne, in lne with expectations. EBITDA for the quarter at Rs 4.7bn grew by 48.1% on y-o-y was below our expectation (Rs 4.9 bn), mainly on account of higher than expected power and coal cost as well as higher freight cost due to increased lead distance.
EBIDTA margins stood at 30.5% registering a massive 810 bps improvement on a yoy basis. UTCL, which imports 40-45% of its coal requirements, had bought 10 handymax cargoes of South African coal at USD 52-53 FOB South Africa for delivery in July- September. Therefore going forward, we expect power and fuel cost per tonne to decline. We maintain our estimates for the FY2010 of EPS at Rs 94.3. We believe that the Grasim-Ultratech restructuring would be positive for Ultratech as it provides significant re-rating triggers for the stock.
This is a comment unrelated to this particular article. I am a foreign national and I am very much concerned about the nude pictures published by the Times of India Daily. This trend is disturbing, as millions of youth and under-aged children are reading the particular News Paper. I wrote to them many times, but the practice is still ongoing. The public and other Media should pay attention to this and stage a protest or even boycott the New Paper. At times their pictures resemble to that of Playboy group, and the like. It is true; India has the blessing of Media freedom, which is admirable. But the misuse of it is causing defilement in the minds and hearts of millions, and therefore the Daily should rethink their motive in the matter.