UltraTech Cement (ULTRACEMCO) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 saw a monsoon- and pre-election-driven slowdown, with 68% capacity utilization and 3% domestic volume growth year-over-year.

• Consolidated net sales for Q2FY25 were ₹15,308 crore, down from ₹15,735 crore in Q2FY24, and PAT declined to ₹820 crore from ₹1,281 crore year-over-year.

• EBITDA declined 18% year-over-year to ₹2,239 crore, and total consolidated revenues decreased 3% year-over-year.

• RAK White became a subsidiary in July 2024, with results consolidated.

• Urban housing and infrastructure projects are gaining momentum, with several large government projects announced.

Financial highlights

• Petcoke usage increased to 54% in the fuel mix, reducing fuel cost per Gcal by 8% sequentially to INR 1.84.

• Employee costs rose 24% quarter-over-quarter due to one-time bonuses; normalized increase is 9-10%.

• Domestic grey cement realisation declined 8.4% year-over-year, while RMC revenue rose 20% year-over-year.

• Energy costs declined 14% year-over-year, but raw material costs increased 1%.

• Operating cash flow was lower due to inventory build-up and seasonal factors, expected to normalize in coming quarters.

Outlook and guidance

• Double-digit volume growth is targeted for H2 FY25, with expectations to outperform industry growth.

• Capacity is set to reach 159 million tons by March 2025 and 184 million tons by FY27, with a long-term target above 200 MTPA including acquisitions.

• Efficiency improvement programs are on track, with cost savings to be reported at year-end.

• CapEx guidance remains at INR 8,000-9,000 crore for the year, with a similar run rate expected next year.

• Management expects sustainable volume growth of 7-8% in future years, driven by infrastructure and housing demand.