Higher prices help India's UltraTech Cement beat quarterly earnings view
The company's consolidated net profit, including gains from its acquisition of India Cements (ICMN.NS), opens new tab, stood at 22.26 billion rupees ($258.11 million) for the quarter ended June 30.
Analysts, on average, estimated 21.56 billion rupees, according to data compiled by LSEG.
On a standalone basis, net profit rose 48% year-on-year.
Cement prices rose about 2% on-year on average in the quarter, according to brokerage Ambit Capital, extending the steady recovery so far this year after last year's slump.
UltraTech shares, which had hit a record high ahead of results, closed 0.5% higher.
The company reported a revenue of 212.75 billion rupees, surpassing analysts' average estimate of 200.12 billion rupees. However, its consolidated sales volume growth of 9.7% was near the lower side of the 9.6%-17.5% growth range projected by four brokerages.
Heavy rains dampened demand in Maharashtra, Gujarat and Odisha, while geopolitical tensions stalled construction activity in India's northern border states, the company said.
India and Pakistan saw their worst clashes in decades in the quarter, following a deadly attack in Indian Kashmir in April. The April-June period is also a seasonally soft quarter for cement companies, as monsoon showers slow construction.
The company's dealmaking, such as the acquisition of India Cements (ICMN.NS), opens new tab and Kesoram's cement business, expanded its capacity-generating asset base and as a result, shielded its sales volumes from weather-led volatility, according to analysts.
Locked in a fierce race with rival Gautam Adani's cement bets - Ambuja (ABUJ.NS), opens new tab and ACC (ACC.NS), opens new tab - UltraTech has moved fast to defend its lead, snapping up smaller players in anticipation of an infrastructure boom.
ACC and Ambuja are set to report results later this month.
($1 = 86.2425 Indian rupees)
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