UltraTech Cement Oct-24

• This is an investor presentation for UltraTech Cement Limited for the quarter ended September 30, 2024.
• The presentation covers macro and sectoral updates; business, ESG, and financial performance updates.

Macro Indicators

• GDP grew by 6.7% in Q1FY25, slowed down by elections and lower consumption.
• India's CPI inflation was around 3.6% in July and August, rising to 5.5% in September because of food inflation.
• GST collections remained steady at ₹1.75tn per month for the quarter; Manufacturing PMI was at 56.5 in September.
• RBI kept the repo rate unchanged for the 10th consecutive time and maintains growth and inflation forecasts for FY25: GDP growth at 7.2% YoY and inflation at 4.5%.

Key Government Initiatives and Economic Drivers

• Road awards picked up in August 2024 after a subdued Q1FY25 by NHAI and MORTH.
• Phase 2 of Chennai Metro has been approved by the Central Government.
• Under the Pradhan Mantri Awaas Yojana – Gramin (PMAY-G), 20 million houses will be built with a total subsidy outlay of ₹3.06 trillion from FY25 to FY29.
• Under the Pradhan Mantri Awaas Yojana – Urban (PMAY-U), 10 million houses will be built with a total subsidy outlay of ₹2.3 trillion.
• Cumulative rainfall for India was 8% above the long period average, which is positive for agriculture and should result in good growth in rural markets.

Sectoral Update

• North Zone: Housing registered growth in both rural and urban areas, infrastructure registered degrowth as projects near completion.
• Central Zone: Housing and infrastructure registered degrowth due to heavy rainfall and project completion, commercial segment registered degrowth due to adverse weather.
• East Zone: Housing registered growth in West Bengal, Bihar, and Jharkhand, infrastructure continued to degrow.
• West Zone: Infrastructure demand was subdued, housing segment demand remained flat, commercial segment registered strong growth.
• South Zone: Housing and infrastructure registered degrowth due to heavy rainfall and lack of funding, commercial demand was muted.

Business Update Q2

• Domestic sales volume grew 3% YoY.
• Blended manufacturing cost per metric ton reduced by 4% YoY for domestic operations.
• Domestic operating EBITDA/Mt was ₹732, lower by ₹224/Mt YoY.
• Ras Al Khaimah Co. for White Cement and Construction Materials PSC (RAKWCT) has become a subsidiary wef July 10, 2024.
• Green Power Mix reached 32%, with WHRS power mix at 18.4% and RE Power Mix at 13.5%.
• Premium product mix was 23.4%, up 8% YoY.
• UBS outlets increased to 4,236, contributing 19.4% of domestic grey sales volume.

Domestic Growth Plans

• Capacity as of March 2024: 140.8 Mtpa.
• Capacity by FY25 (excluding Bulk Terminal): 157.0 Mtpa.
• Capacity by FY27 (excluding Bulk Terminal): 183.5 Mtpa.
• Plans include commissioning new units and expansions at various locations across India.

UltraTech: Marching Ahead

• The company is spreading across 70 locations by FY27.
• Grey cement capacity is expected to reach 183.5 MTPA.

ReadyMix Concrete (RMC): Q2 FY25

• 321 plants (up 71 YoY)
• Across 134 cities (up 18 YoY).
• Volume of 3.01 Mn m³ (up 19% YoY).
• Revenue of ₹1,397 Crores (up 20% YoY).
• ROCE% is 40%.

Sales Performance Overview

• Trade: 67.5%, Non Trade: 32.5%
• Bag Sales: 84.7%, Bulk Sales: 15.3%
• Road: 71%, Rail: 27%, Sea: 2%
• Direct Sales: 55.3%, Depot Sales: 44.7%

ESG Update

• The Company runs 31 schools across plant locations, benefitting more than 18,000 students.
• Scope 1 Net CO2 Emission: decreased by 1.8% to 550 kg CO2/t cement in H1FY25.
• Alternative Raw Material and Fuel: increased by 20% to 21.53 MnT in H1FY25.
• Water Positive: 5.5x in H1FY25, a 21% increase.
• Green Power Mix: increased by 38% to 30.6% in H1FY25.

ESG - Trends and Goals

• UltraTech aims to achieve net-zero emissions by 2050, and double its energy productivity by 2035.
• Achieve 85% green power in total mix by 2030 and 100% RE by 2050.
• Water Stewardship: Goal 5 times water positive

Financial Performance

• UltraTech raised USD 500 million through sustainability-linked financing with a fully hedged cost of less than 7.25%.

Sales Volume

• Grey Cement grew by 3% YoY, while sales volume in India grew by 3% YoY.
• Cement Export grew by 37%.
• White Cement grew by 7%.
• Overseas grew by 40%.
• Ready Mix Concrete grew by 19%.

Revenues

• Grey Cement Domestic revenues decreased by 6% YoY.
• White Cement decreased by 10%
• RMC increased 20% YoY
• Overseas increased by 39% YoY

Profitability

• EBITDA: ₹2,239 Crores.
• PAT: ₹820 Crores.

Key Cost Indicators (Grey Cement)

• Logistics: 29%
• Fuel: 22%
• Power: 10%
• Raw Materials: 15%

Logistics Cost

• YoY costs decreased by 2%, lead distance was reduced.
• QoQ costs decreased by 1%, and lead distance marginally increased.

Fuel Cost

• QoQ decreased by 7% and YoY cost decreased: 17%

Power Cost

• YoY cost decrease: 7%
• QoQ cost increase: 5%

Raw Material Cost

• QoQ cost increase: 3% and yoy cost increase: 1%

Other Costs

• QoQ cost increase: 14% and yoy flat

Twelve 5-Star Rated Mines for Sustainable Mining

• Twelve of UltraTech's Limestone Mines have been rated 5 Star by the Indian Bureau of Mines in 2024 for Sustainable Development Framework in mining.

Sustainability Recognition

• UltraTech ranked No.1 in sustainability in Cement & Building Materials sector in India.
• UltraTech ranks among Asia-Pacific Climate Leaders 2024.