UltraTech Cement Q4 Review – Operating Leverage Increases Margin : HDFC Securities

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HDFC Securities Institutional Equities

We continue to appreciate UltraTech Cement Ltd. for its good margin outlook and balance sheet management.

The Company’s Q4 FY22 Consolidated EBITDA/Adjusted After-Tax Earnings fell 17/19% YoY (despite 10% revenue growth) due to weak demand ( through mid-February), which reduced cost pass-through amid rising energy costs.

While EBITDA per unit recovered 6% QoQ (on operating leverage gains), energy inflation pushed it down 17% YoY to Rs 1,110/million ton.

UltraTech Cement expects to maintain this margin in the first quarter of FY23 due to its low cost fuel inventory and good cost pass-through.

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