Tag: UltraTech

700% Dividend Alert: India’s largest cement company announces its highest payout ever

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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UltraTech Cement Ltd., India’s largest cement company recommended a final dividend of ₹70 per share or 700% on face value of ₹10 each.

The dividend will be subject to approval of shareholders at the company’s ensuing annual general meeting (AGM). The date for the AGM will be determined in due course.

This is the highest ever dividend payout the company has declared since at least 2019. Last year, the company had announced a dividend of ₹38 per share, and a similar quantum in 2022 as well.

In 2021, UltraTech had announced a dividend of ₹37 per share, following a ₹13 per share payout in 2020 and ₹11.5 in 2019.

UltraTech has never declared a bonus issue nor a stock split, based on the data available on the exchanges.

The cement major reported an expansion in margin for the March quarter, contrary to expectations of a contraction and also after margins of its peers saw contraction year-on-year. Lower power and fuel costs aided the company’s margin profile.

In line with expectations, realisations for UltraTech declined by 3.8% year-on-year and 6% sequentially. Power and Fuel costs were down 9% from last year during the quarter to ₹4,838 crore.

Shares of UltraTech Cement ended 2.8% higher on Monday at ₹9,970. The stock has risen 33% in the last 12 months. However, the stock is still down 5% on a year-to-date basis.

(With Inputs From Nigel D’Souza.)

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nomura expects strong volume growth to aid cement margins; Upgrades UltraTech, Ramco

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Brokerage firm Nomura has upgraded cement stocks UltraTech Cement, Dalmia Bharat and Ramco Cements, along with raising their respective price targets as well.

The brokerage has upgraded these stocks to “buy” from the earlier rating of “neutral.” Additionally, it has also increased the price target on Shree Cements, while maintaining its “buy” recommendation.

Nomura believes that the momentum in cement stocks is likely to continue with margins expanding on the back of stronger volume growth, pricing discipline and relatively lower fuel costs.

The brokerage also expects strong sales volume growth to continue in the second half of the current financial year. Volume growth over financial year 2025-2026 is likely to be higher than that in the past decade, Nomura said.

Trade prices are also likely to improve as the industry exits a pre-election phase with a recent industry survey suggesting a bright outlook, the brokerage said.

Shares of UltraTech Cement are trading at a record high of ₹10,300, having gained 2.8%. The stock is closing in on the ₹3 lakh crore market capitalisation mark.

Shares of Ramco Cement are also trading 2.2% higher at ₹1,010, while those of Dalmia Bharat are also trading 3% higher at ₹2,309.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ultratech to have 85% green energy mix by 2030

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The largest cement and ready-mix concrete maker Ultratech Cement on Wednesday announced that it plans to increase the overall share of green energy in its total energy mix to 85% by 2030. As an interim target for its sustainability objectives and targets, the AV Birla Group company plans to increase its total green energy share from its current 22% to 60% by FY26.

Currently the company has 691 MW of green energy capacity, which includes 262 MW of WHRS (waste heat recovery system) installed capacity and 429 MW of contracted renewable energy. This translates to about 22% of its current energy requirements.

“As the country’s largest cement maker, it is our responsibility to lead the way in building a more sustainable and green future for the industry by decarbonisation. We’ve been constantly scaling up our green energy mix over the years,” said KC Jhanwar, the managing director.

Ultratech targets to meet 100% of its electricity requirement through renewable sources by 2050, as part of its commitment towards green power. As a member of EP100, Ultratech is committed to doubling its energy productivity.

To boost the share of green energy in the overall energy mix, the company has taken several initiatives including switching to renewable energy sources and expanding waste heat recovery systems. It has been reducing reliance on thermal energy in manufacturing operations and also driving adoption of sustainable transport with logistics partners.

Recently it partnered with Coolbrook, a Finland-based transformational technology and engineering company to jointly develop a project to implement Coolbrook’s rotodynamic heater (RDH) technology in one of its manufacturing units.

This technology uses electrification from renewable sources for heating thus removing the need for fossil fuels. Similarly it is actively exploring innovative technologies like carbon capture, utilisation, and storage (CCUS) in collaboration with startup technology companies such as CarbonOrO, Coomtech, and Fortera.

To reduce carbon footprint in its logistics segment, Ultratech has introduced CNG/LNG trucks. It has plans to deploy 500 electric trucks and add 1,000 40 tonne CNG/LNG trucks by June 2025 as part of government’s eFast initiative.

Ultratech first introduced CNG vehicles in its operations in 2021 and LNG vehicles in 2022 and has over 390 CNG trucks and 50 LNG trucks operational across 17 manufacturing units.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UltraTech-Kesoram deal benefits both the company and industry, say analysts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Analysts tracking UltraTech Cement Ltd., India’s largest cement maker believe that the acquisition is positive for both the companies.

On Thursday, UltraTech announced the acquisition of Kesoram’s cement assets, confirming a CNBC-TV18 newsbreak from November 24.

In lieu of this, UltraTech will issue one equity share for every 52 shares of Kesoram. The deal values Kesoram at a 24.5% premium compared to its closing price on Thursday and at an enterprise value of ₹7,500 crore.

Brokerage firm Morgan Stanley said that the move is incrementally positive for the industry as it reduces the risk of excess organic supply in the medium-term.

It also said that the deal is positive for UltraTech, given its increased footprint in the south and should help drive economies on scale and therefore potential operating synergies.

Morgan Stanley is Overweight on UltraTech with a price target of ₹9,300.

CLSA believes that this acquisition, along with UltraTech’s ongoing organic expansion, will take the company’s total capacity to 192 MT in the next four years, bringing it a step closer to its stated goal of 200 MT capacity by financial year 2028.

The brokerage has an outperform rating on UltraTech with a price target of ₹9,450.

Goldman Sachs believes that the proposed transaction would expose UltraTech to 10.75 million tonnes of cement capacity, taking its current capacity to 149 MT, and help it move closer to its 200 MT target.

“With its strong track record of turning around profitability of its past acquisition like JP Associates and Binani, similar actions for Kesoram’s assets will be key to watch out for,” the note said.

InCred believes that the deal is structurally positive from a long-term perspective as the company has a track record of turning around businesses to its standard.

It will also help expand its footprint in the southern market, where it has a relatively lower market share.

InCred has an “Add” rating on UltraTech and a price target of ₹9,500.

Out of the 44 analysts that track UltraTech, 33 continue to have a “buy” rating on the stock, nine say “hold,” while two have a sell rating.

Shares of UltraTech Cement have gained 0.3% on Friday to trade at ₹9,029. On the other hand, shares of Kesoram Industries are locked in an upper circuit of 5% at ₹146.35.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UltraTech board approves ₹13,000 crore investment to expand cement capacity by 21.9 MTPA

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Board of Directors at Ultratech, a flagship company of the Aditya Birla Group, approved a substantial ₹13,000 crore investment on Saturday, October 28. This investment is aimed at increasing their cement production capacity by 21.9 million metric tonnes per annum (MTPA) through a combination of greenfield and brownfield projects.

With this investment, Ultratech is boosting its total capacity to 182 MTPA in India.

The commitment to India’s growth story was emphasised by Kumar Mangalam Birla, the Chairman of the Aditya Birla Group, who stated, “This investment is yet another marker of UltraTech’s commitment to India’s growth story.” He went on to highlight the company’s previous investments, which have exceeded ₹50,000 crore over the past seven years.

Birla expressed the significance of this fresh commitment by stating, “With each investment, we have not only expanded our footprint but also powered India’s needs for housing, roads, and other vital infrastructure.”

He reiterated the company’s target to reach a capacity of 200 MTPA and described this expansion as a pivotal step in that direction.

Ultratech’s continuous growth reinforces its position as one of the largest cement companies globally and a national champion, he added.

An essential aspect of this investment is Ultratech’s commitment to sustainability. The company has decided not to invest in thermal power capacity as part of its mission to reduce carbon emissions.

Instead, they plan to set up an additional 39 MW Waste Heat Recovery System (WHRS) capacity, costing ₹453 crore, and invest ₹180 crore in alternative fuel feeding and handling equipment to contribute to reducing carbon emissions.

Ultratech aims to use green energy in excess of 60% by the end of 2027, supported by a total WHRS capacity of over 400 MW and approximately 1.5 GW of renewable energy.

Once the third phase of expansion, as approved by the Board today, is commissioned, Ultratech will have a robust presence across India with 35.5 MTPA in the South, 40.4 MTPA in the East, 36.2 MTPA in the North, 35.7 MTPA in the Central region, and 33.8 MTPA in the West.

“This will be achieved by setting up 4 greenfield and 4 brownfield plants alongwith 4 greenfield bulk terminals,” it said in a statement.

The new capacities are expected to commence commercial production in a phased manner starting from the fiscal year 2026.

The stock has gained close to 17% in 2023 so far.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Q2 Results Preview: The sectors and companies that may report the best and worst profit growth

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Energy, consumer discretionary and materials are the three sectors that are likely to contribute the most to the profitability of Nifty 200 companies for the September quarter, according to Bloomberg consensus estimates.

Net profit of the top 200 companies of the country is likely to hit Rs 2.4 lakh crore, which is an increase of 44.5 percent from the same period last year.

On the topline front, these three sectors are likely to contribute to more than half of the combined revenue of the index, which is pegged at Rs 22.3 lakh crore for the quarter.

The sample comprises of 176 companies of the Nifty 200 index, for which earnings estimates for the quarter are available.

While analysts expect Oil Marketing Companies (OMCs) – HPCL, BPCL and Indian Oil to return to profit in the September quarter, Reliance Industries is likely to report a net profit growth of over 50 percent during the September quarter compared to last year.

Other blue chip companies, which are likely to post double-digit growth in their net profit include Larsen & Toubro, Bharti Airtel, HDFC Bank, Maruti Suzuki, among others. In terms of sectors, the net profit of the energy segment is likely to double year-on-year, while that of consumer discretionary and materials is likely to surge by 89 percent and 85 percent respectively.

On the flip side, the number of loss making companies is likely to reduce to six from 16 that reported a net loss during the year-ago quarter. Tata Motors is likely to report a net profit of Rs 4,560 crore during the September quarter, compared to a net loss of Rs 945 crore that it reported during the same period last year. Similarly, Zomato is also likely to report a net profit, compared to last year’s Rs 251 crore loss.

Vijay Jaising of JM Financial Services told CNBC-TV18 that he expects the market to move sideways over the short-to-medium term. “But as the earnings trajectory keeps on moving towards India and everything is pointing towards a 15-16 percent earnings CAGR this year and next, you will start seeing the market also move upward as we move towards elections,” he added.

Earnings for the September quarter begin next week with TCS starting for largecap companies on October 11.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Elderly village man shocks internet with Rs 10 crore L&T and UltraTech shareholdings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UltraTech Cement commissions new brownfield cement capacity at Gujarat’s Magdalla unit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s largest cement producer UltraTech Cement Ltd. on Wednesday announced the commissioning of the 1.2 million tonnes per annum (mtpa) brownfield cement capacity at Magdalla, Gujarat.

The new addition takes the unit’s total capacity to 1.93 mtpa. UltraTech Cement also informed the stock exchanges that its total grey cement manufacturing capacity in India now stands at 132.45 mtpa.

Last month, UltraTech Cement reported strong growth in revenue and profit for the quarter ended June 2023, beating analyst estimates.

The company reported a net profit of Rs 1,690 crore for the quarter, 7 percent higher than the Rs 1,582 crore in the same quarter last year.

Revenue also jumped 17 percent in the quarter under review to Rs 17,737.10 crore as against Rs 15,163.98 crore reported in Q1 FY23.

UltraTech Cement said that its domestic sales volume in the June quarter rose by 20 percent year-on-year with capacity utilization of 89 percent.

It added that the demand for cement across all sectors continues to remain strong, which is highly favourable for the company’s performance. Higher infrastructure spending ahead of the general elections in 2024 was expected to further propel cement demand during this fiscal year.

After UltraTech Cement announced its Q1FY24 earnings, brokerage firm Motilal Oswal said that the company’s leadership position in the industry, robust expansion plans without leveraging the balance sheet, and structural cost-improvement measures keep them bullish on the stock.

It recommended a ‘buy’ rating on the UltraTech Cement stock with a price target of Rs 9,085.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Cement sector records strong volumes in Q4 but pricing still under pressure

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The cement sector has reported its earnings for the fourth quarter of the financial year gone by (FY23) and there has been a significant increase in the total volume produced. However, the price has not seen any significant change. The cost is expected to remain low despite the strong volumes.

Even in the current month, where prices usually increase, there hasn’t been any significant change, and any minor changes have been rolled back. The numbers show that the volumes are exceptionally high, with UltraTech Cement, Dalmia Bharat, and even ACC showing growth of 10 to 15 percent despite the Himachal unit shutdown. There are no concerns on the volume front.

The good news is that costs have been decreasing, but pricing has been under pressure with a decrease of 1 percent to 3 percent sequentially. This pressure has been particularly felt in the south, with companies like ACC experiencing a pricing compression of almost 3 percent.

Anil Singhvi of Shree Digvijay Cement who has been tracking this industry for a long time and has headed several companies, gave a few insights. He mentioned that the focus is currently on volumes, and pricing has taken a backseat.

Read Here | Cement maker Dalmia Bharat Q4 profit zooms 121% to Rs 589 crore, beats estimates

Additionally, he predicted that any price increase is unlikely to occur until October, after the monsoon season. He also advised not to expect any inorganic growth, which was a topic of discussion previously.

Dalmia provided an update on the cost of fuel, which was significantly high but is gradually decreasing. For the upcoming quarter, it is expected to be lower by approximately $10 per tonne, which is a considerable amount.

Over the last year, the average fuel cost increased by about $50 per tonne. However, it is anticipated that this will correct itself and decrease by $40 to 50 per tonne.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow