Hold on UltraTech Cement - Geojit BNP Paribas Financial Services Limited

3QFY12 standalone results surprised positively with EBITDA at Rs.1040 crore and recurring PAT at Rs.620 crore. Better than expected numbers are due to higher than expected realization, higher other income and lower interest costs.

Operating cost/ton was in line with estimate but EBITDA/ ton was 15% higher than estimates driven by 8% qoq increase in realization.

Looking forward, the company has indicated that higher energy costs increase after the recent change in coal pricing mechanism by Coal India could put pressure on margins. Any roll-back in the price increase by Coal India would be positive to the company as well as the industry.

Volume growth in 3QFY12 was good on a sequential basis supported by strong growth in November-December 2011, but it is not clear whether this trend should continue.

The company is on track to commission its 9.2 million ton capacity expansion by 1QFY14.

Source : Equity Bulls

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