InvestorQ : How did Ultratech manage to set up such good show in the Sep-20 quarter results?
Angel dcosta made post

How did Ultratech manage to set up such good show in the Sep-20 quarter results?

Juvina Maggie answered.
10 months ago

UltraTech Cement, India’s largest cement company and the arm of the Aditya Birla group, reported 113% increase in Sep-20 quarter profits at Rs.1235 crore more than doubling its profits over the previous year, despite the challenges of COVID in between.

During the quarter, the company reported exceptional loss of Rs.335.73 crore, which included an impairment provision of Rs.57.92 crore towards old advances for purchase of certain land, while Rs.271 crore was made on a loan receivable which went bad.

The company also had an exceptional gain of Rs.360 crore from the sale of its Chinese subsidiary. It has now divested its entire equity stake of 92.5% in the Chinese subsidiary for a little below $100 million.

Total sales revenues for the Sep-20 quarter grew by 7.7% to Rs.10,354 crore which included a very attractive volume growth of 18% as the economy tries to bounce back to shape after the COVID impairment. Strong quarterly performance was also driven by operational efficiencies and its pan-India presence which is an automatic de-risking factor.

During the Sep-20 quarter, the earnings before interest, tax, depreciation and amortisation or EBITDA spiked by 40% to Rs.2695 crore while the EBITDA margins expanded 600 basis points to 26%, one of the best levels of performance in the cement industry.

There is also good news on the debt front. In fact, for the second quarter in a row, Ultratech reduced net debt substantially via prudent working capital management. The company managed to shave off Rs.4728 crores of net debt in H1 fiscal 2020-21.