India's UltraTech Q2 net almost doubles, warns on costs

Sat Oct 20, 2012 2:02pm IST

Stocks

   

* Q2 net profit up 97 pct on low base

* Variable costs up 8 pct in qtr, freight costs weigh

MUMBAI Oct 20 (Reuters) - UltraTech Cement, India's biggest cement producer, reported a near doubling of profit in the quarter to the end of September from a low base but warned of higher costs for materials, fuel and freight.

Demand for cement in India, the world's second-largest producer after China, is expected to rise about 8 percent during the fiscal year that ends in March, driven by a government push to expedite infrastructure projects to revive growth.

Sales growth across the sector has been slow this year as a result of sluggish homebuilding and construction in Asia's third-largest economy.

Margins of cement makers have come under pressure in recent months due to an increase in the cost of fuel and transport. Ultratech's variable costs rose 8 percent in the quarter from a year previously, the company said on Saturday.

In September, the government hiked diesel prices by 14 percent and that will have a further impact on cement producers.

Major rivals Ambuja Cements and ACC Ltd warned this week that rising fuel and freight costs could nullify increased demand over the coming months.

UltraTech is among a group of cement makers fined a total of $1.1 billion in June for price fixing.

The company, part of the diversified Aditya Birla Group, said its additional capacity of 10.2 million tonnes per year at plants in Chhattisgarh and Karnataka would be operational in the early part of the fiscal year that begins in April 2013.

UltraTech reported a 97 percent rise in standalone profit to 5.5 billion rupees for the July-September quarter, falling short of market estimates of 5.89 billion rupees, according to Thomson Reuters I/B/E/S.

Net sales rose 20 percent to 47 billion rupees. (Reporting by Henry Foy; Editing by Paul Tait)

  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

Intel's Valuation

Intel's Valuation

Intel could rise 30 percent over next two years - Barron's.  Full Article 

Canonisation

Canonisation

Pope declares sainthood of two Indians, four Italians.  Full Article 

Stake Sale Strike

Stake Sale Strike

Coal India trade unions call off strike in victory for Modi.  Full Article 

Interview with Bulgari CEO

Interview: Bulgari CEO

Bulgari CEO: we shouldn’t have left India so we’re back.  Full Article 

Formula One

Formula One

Hamilton takes second F1 title in style.  Full Article 

Available For Remake

Available For Remake

Bollywood finally wants to pay the price for remakes.  Full Article 

Davis Cup

Davis Cup

Vintage Federer seals first Davis Cup for Switzerland.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage