Shares of UltraTech Cement gains over 1% to hit intra-day high of Rs 11,080 on NS today after the company, India’s largest cement manufacturer, reported a 36% drop in net profit for the September quarter (Q2 FY25), driven by lower revenue from operations.
UltraTech Cement’s Q2FY25 Performance
The cement manufacturer reported a 35.5% year-on-year (YoY) drop in consolidated net profit, falling to Rs 825.18 crore in Q2 FY25 from Rs 1,280.38 crore in the same quarter last year. This sharp decline in profitability reflects the impact of lower revenues and rising costs.
Revenue and Sales Decline
The company’s revenue from operations dipped 2.3% YoY to Rs 15,634.73 crore in Q2 FY25, compared to Rs 16,012.13 crore a year earlier. Net sales also experienced a 2.7% drop, standing at Rs 15,308 crore during the quarter under review.
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EBITDA and Margins Also Seen in Pressure
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 21% to R 2,019 crore, down from Rs 2,550.9 crore in Q2 FY24. This decline in operating profitability was accompanied by a margin contraction of 300 basis points (bps), with EBITDA margins slipping to 12.9%.
Brokerages on UltraTech Cement
Macquarie on UltraTech Cement
Macquarie has maintained a “Neutral” rating on UltraTech Cement with a target price of Rs 11,106. According to the report, the company’s Q2 performance was in line with expectations, and the outlook for margins in the second half remains constructive.
Management is optimistic about demand, while ongoing expansion plans are on track. Macquarie expects margins to improve, driven by the normalization of seasonal costs and anticipated cement price hikes.
Goldman Sachs on UltraTech Cement
Goldman Sachs has maintained a “Buy” rating on UltraTech Cement but reduced the target price to Rs 11,720 from Rs 12,430 following its Q2 review. The report highlights management’s optimism about a recovery in the second half,
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