After heightened concerns following ACC’s weak results, UltraTech brought the excitement back with a strong 4QFY19 (January-March quarter of 2018-19). “Understanding quarterly numbers is difficult due to consolidation of UNCL (Binani), but organic unit Ebitda near Rs1,100/t was the highlight, a bulk of which came from cost with some support from realisation,” said Vivek Maheshwari, Investment Analyst, CLSA in its results review. Management believes the industry is decisively in an upcycle, although the election outcome and monsoon are key events to await. Balance sheet deleveraging is high on the agenda.
The management estimates FY19 demand growth at 12%, a second consecutive year of double-digit growth. Capacity additions at 12 million tonnes (MT) trailed incremental demand at 38 MT, and the improvement in utilisation is likely ahead – FY19 already saw a 5ppt YoY improvement to 71%. Exit cement prices were higher than the 4Q average, which improves the near-term outlook.