Pickup in De­mand, Low In­put Costs Help UltraTech Shine

The Economic Times - - Smart -

in re­duc­ing fuel cost. In the March quar­ter, the com­pany’s power and fuel ex­penses fell 14.2% YoY to ₹ 1,016 crore. But the ben­e­fit of lower fuel ex­penses seem to be nul­li­fied by freight costs, which grew 12% to ₹ 1,636 crore. Due to this, op­er­at­ing mar­gins (EBITDA mar­gins) re­mained at 22%. It would take over a year for Ul­traTech­toseekap­proval­from­reg­u­la­tor for its ac­qui­si­tion of ce­ment as­sets of JP As­so­ci­ates. For FY17, ce­ment de­mand is ex­pected to grow in the range of 7-8%. UltraTech, with its en­hanced ca­pac­ity and net debt to equity of 0.2, is ex­pected to ben­e­fit. Con­sid­er­ing FY18E ear nings, UltraTech’s en­ter­prise value is 12x EBITDA, which is lower than its three-year EV/EBITDA of 19.1.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.