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UltraTech Cement Results for Q1 FY23 are out. Should you stay Invested?

UltraTech Cement Results for Q1 FY23 are out. Should you stay Invested?

UltraTech Cement Q1 FY23 result

UltraTech Cement Q1 FY23 results declared: check out its key highlights here.

Cement giant UltraTech Cement has just announced its results for Q1FY23. The company is the largest grey cement, ready-mix concrete, and white cement manufacturer in the country. The company declared decent results which were above our estimates on all fronts. Let’s check it out!

UltraTech Cement Q1 FY23 results highlights


😊Net revenue grew by 28.2% YoY but declined by 3.8% from the last quarter, standing at 15,163 crores. This was above our expectations of 14,130 crores.
😊Due to realization and volume growth, the topline growth was healthy on a YoY basis.

:)Sales volume grew by 16% from the first quarter of the previous year but declined by 9.6% from Q4 to 25 MMT above our recommendation of 24.3 million tons.
😊Realization/ tonne grew by 10.2% YoY to 6,056.
😊PAT saw a growth of 38% YoY and 43.5% QoQ to 24538 mn.


  • 🙁 EBIDTA declined by 6.4% YoY and remained flat QoQ to 3,095 crores above our expectations of 2,587 crores. EBITDA margin reduced by 7.55% and grew by 92 bps over the previous quarter.
  • The margin contraction was mainly due to the rise in energy costs and coal costs.
  • 🙁 Raw material cost also saw an increase by 13% YoY to 577/tonne, which was a result of an increase in diesel cost and input material costs.
  • :(EBIDTA/tonne fell by 19.5% YoY but grew by 11.4% over the last quarter to 1,236/tonne above our estimates of 1,065.
  • :(PAT declined by 7% from the first quarter of the previous year and 35.6% from the last quarter to 1,581 crores above our estimate of 1,205 crores. PAT margin contracted by 3.94% YoY to 10.4 %. Muted operating performance impacted the margin.

Management Speak: UltraTech Cements Q1 FY23 results

  • Volumes were high backed by good demand from infrastructure, commercial and housing across all regions. Cement demand was impacted by overall inflationary trends and lower labour availability in May 2022. However, cement demand picked up in June 2022 on pre-monsoon construction activity.
  • Healthy realization growth was mainly due to an increase in cement prices mostly across all regions and an increasing share of the premium product mix which rose 3.2% YoY to 17.4%.
  • Cement demand picked up in this cycle as urban housing has picked up. Several new projects are on rising which will benefit cement demand. Large Infrastructure projects are leading to the overall demand for cement in the infrastructure space.
  • Given the inflation cost company expects pricing to be better in coming times.
  • Input cost has been rising continuously fuel and energy cost has been a matter of concern production cost has been continuously rising. Input cost to remain on an elevated level even in next quarter.
  • Pet coke prices have declined by more than 10% in the last month. Coal prices are also expected to cool down which will aid in margin improvement in the longer run.
  • The capacity expansion plan of the company of 22.6 Mn tons is well planned and will be completed as per the timeline of FY25-26. This CAPEX plan is targeting an internal rate of return of 15% from FY26. The company is focusing on CAPEX as it believes India will be a strong growth market for a long time and the demand for cement will be huge so the company doesn’t want to fall short of capacity.
  • In FY26E company expects EBIDTA/ton to be in the range of 1,400 to 1,500 /ton.
  • Trade and Non-trade mix for the quarter stood at 67% and 33%.

Valuation and Outlook

We remain optimistic about the domestic cement demand growth over a longer period driven by expectations of healthy demand from infrastructure, rural housing and urban housing. Ultratech has been witnessing better than the industry’s growth over the years. We expect this to sustain going forward as well owing to the huge capacity addition plan by FY25E (22.6mnT). Further, the OCF generation has been quite healthy in recent years mainly supported by steady realization. The company delivered a decent performance in the quarter compared to its peers.

Further with the reduction in pet coke and coal prices we expect margins to improve going ahead. At a CMP of 6,454, The stock is trading at an EV/EBIDTA multiple of 16.6(x) to its FY22 EBIDTA of ₹11,514 crores. We maintain a positive outlook on the stock with a price objective of 7,400.

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