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UltraTech Cement — Q3 FY24
UltraTech reported a steady Q3 FY24 with industry demand growth of 3%-4%, impacted by elections, floods, and seasonal slowdown.
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UltraTech reported a steady Q3 FY24 with industry demand growth of 3%-4%, impacted by elections, floods, and seasonal slowdown. Management highlighted that demand improved from mid-December and expects Q4 utilization to cross 80%-85%. Fuel costs declined to INR 2.048 per kcal, with further 6%-8% reduction expected over two quarters. The company maintained its expansion trajectory, with Phase 3 orders placed and CapEx of ~INR 9,000 crore for FY24 and FY25 each. The Kesoram acquisition (effective April 2024) adds ~10.75 MTPA capacity. Net debt target by March 2025 remains zero, excluding Kesoram debt. Key risk: election-related disruptions could temper Q4 demand recovery.
अल्ट्राटेक ने Q3 FY24 में स्थिर प्रदर्शन दिया। उद्योग की मांग 3%-4% बढ़ी, लेकिन चुनाव, बाढ़ और मौसमी सुस्ती का असर रहा। कंपनी ने कहा कि दिसंबर के मध्य से मांग सुधरी और Q4 में क्षमता उपयोग 80%-85% पार करने की उम्मीद है। ईंधन की लागत घटकर 2.048 रुपये प्रति किलोकैलोरी हो गई, और अगले दो तिमाहियों में इसमें 6%-8% और कमी आने की संभावना है। कंपनी ने विस्तार जारी रखा, तीसरे चरण के ऑर्डर दे दिए गए और FY24 व FY25 में लगभग 9,000 करोड़ रुपये का पूंजीगत खर्च होगा। केसोरम अधिग्रहण (अप्रैल 2024 से) से क्षमता में लगभग 10.75 मिलियन टन प्रति वर्ष का इजाफा होगा। मार्च 2025 तक शुद्ध कर्ज शून्य रखने का लक्ष्य है, केसोरम के कर्ज को छोड़कर। मुख्य जोखिम: चुनाव से जुड़ी रुकावटें Q4 की मांग को कम कर सकती हैं।
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Election-related demand disruption
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Industry demand growth Q3
3%-4%
N/A
Industry grew 3%-4% in Q3 due to seasonal and external disruptions.
Fuel cost per kcal
INR 2.048
-6.2% QoQ
Fuel cost declined from INR 2.184 in Q2 to INR 2.048 in Q3.
Capacity utilization
77%
N/A
Utilization was 77% in Q3; expected to cross 80%-85% in Q4.
Trade sales mix
64%
N/A
Trade sales constituted 64% of volumes in Q3.
What Changed vs Last Quarter
NEW
Q4 utilization to cross 80%-85%
Management expects capacity utilization to exceed 80%-85% in Q4 FY24, driven by demand recovery from mid-December.
NEW
Fuel cost reduction of 6%-8% over two quarters
Fuel costs are expected to decline 6%-8% over the next two quarters (Q4 FY24 and Q1 FY25) from current levels.
NEW
Zero net debt by March 2025 (excluding Kesoram)
The company aims to achieve zero net debt by end of FY25, excluding the INR 2,000 crore debt from Kesoram acquisition.
UPDATED
CapEx of ~INR 9,000 crore in FY24 and FY25
Capital expenditure will be around INR 9,000 crore each in FY24 and FY25, including growth and maintenance CapEx.
DROPPED
Capacity expansion to 159.65 MTPA by mid-2025
The ongoing 24.4 MTPA expansion (including debottlenecking and slag mills) is on track for completion by June 2025 ±, with gradual commissioning.
DROPPED
Third phase of ~20 MTPA expansion to be announced by end of calendar 2023
The next phase of growth will be presented to the board before end of calendar year 2023, targeting completion by calendar 2027.
DROPPED
Fuel inventory to normalize to 45 days by March 2024
Current fuel inventory of 60 days will be reduced to normal levels of 45 days by end of March 2024.
NEW RISK
Election-related demand disruption
General elections in 2024 could slow construction activity and impact Q4 demand recovery, as noted by management.
NEW RISK
Price weakness due to demand slowdown
Prices corrected towards end of Q3; if demand does not pick up, pricing pressure may persist, affecting margins.
NEW RISK
Kesoram integration and regulatory delays
The Kesoram acquisition requires CCI and NCLT approvals; delays could postpone expected synergies and capacity benefits.
RISK GONE
Pricing sustainability amid competitive pressures
While prices have increased 5-7% from June exit, management noted that if some companies cannot sell at higher prices, they may start pricing differently, threatening price discipline.
RISK GONE
Slag and fly ash cost inflation
Analyst raised concern about steep slag inflation, with slag potentially more expensive than clinker. Management confirmed these are key raw material cost items but did not quantify impact.
RISK GONE
East region demand slowdown
East India continues to experience slow demand, with industry growth expected at only 4-5% vs. 9-11% all-India, though UltraTech grew faster.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24
The next phase of growth will be presented to the board before end of calendar year 2023, targeting completion by calendar 2027.
Fast read
Guidance and risk preview
Management expects capacity utilization to exceed 80%-85% in Q4 FY24, driven by demand recovery from mid-December.
General elections in 2024 could slow construction activity and impact Q4 demand recovery, as noted by management.
View Risks →