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Pan-India centered cement main Ultratech Cement Ltd posted better-than-expected June quarter earnings. Standalone internet revenue fell 36% year-on-year (y-o-y) to ₹806 crore within the June quarter. Standalone income for the quarter declined 33% y-o-y to ₹7,290 crore. The firm exceeded analysts’ estimates on each these fronts.
However, the inventory has been rewarded for different key positives such as less- than-expected decline in cement gross sales volumes, higher working margins on strict value controls and debt discount.
In the June quarter, cement gross sales volumes declined 22% year-on-year to 14.65 million tonnes. Given the demand slowdown, analysts have been pencilling-in an annual quantity decline of 30-35%. In its traders’ presentation, the corporate mentioned that it initiated an overhead value discount program with a 10% value discount goal. On a y-o-y foundation, the corporate’s mounted value declined 21% and the corporate noticed a Rs105/tonne discount over the March quarter of fiscal yr 2020. Further, the corporate’s consolidated internet debt diminished ₹2209 crore from ₹16,860 crore within the March quarter of fiscal yr 2020 to ₹14,651 crore within the June quarter.
Shares of the corporate rallied round 7% intraday on the NSE publish outcomes. The inventory is at present buying and selling at ₹4176.95 on the NSE. After friends ACC Ltd, Ambuja Cements Ltd and India Cements Ltd managed to sail by a tough June quarter, the Street was not so anxious about Ultratech’s earnings. No surprise then that the Ultratech inventory was buying and selling within the inexperienced forward of earnings. In this calendar yr to this point, the Ultratech inventory has outperformed benchmark index Nifty50 by posting 1.15% returns as in opposition to the 7.5% fall in Nifty.
On the valuations entrance, the inventory is buying and selling at a one-year ahead EV/Ebitda of 17 instances, a lot larger than friends ACC Ltd and Ambuja Cements Ltd. EV stands for enterprise worth. Ebitda is brief for earnings earlier than curiosity, tax, depreciation and amortisation
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