UltraTech Cement to invest Rs 940 crore to strengthen eastern markets

India's largest cement company, UltraTech Cement is planning to invest Rs. 940 crore to increase the production of premium products for strengthening its position in eastern markets.

This fund will be used to increase its grinding capacities in Bihar and West Bengal by 0.6 MTPA each and a new grinding unit of 2.2 MTPA in Odisha. All plants will be commissioned by Q1FY21E.

Looking at the Eastern markets, Ultratech Cement holds 12% share of market mix and 13% share in the industry.

Recently, the company has come up with earnings for the quarter ended September 30, 2019. Company's revenue for the quarter Q2FY20 came in at Rs. 9620.47 crore as against Rs. 9249.26 crore in the corresponding quarter last year, registering 4% yoy increase. The EBITDA for the quarter grew by 35% yoy to Rs. 1918.09 crore as against Rs. 1421.17 crore in the corresponding quarter last year, with a corresponding margin expansion of 457 bps. EBITDA margin for the quarter stood at 19.9%. The PAT for the quarter came in at Rs. 578.55 crore as against Rs. 355.82 crore in the corresponding quarter last year, yoy increase of 62.6%.

On the debt front, company has reduced its debt by Rs. 1492 crores in Q2FY20 to Rs. 20619 crore from Rs. 22111 crore in Q4FY19.

Company has also completed acquisition of century's cement business w.e.f 1st October 2019. With this acquisition, Ultratech's cement capacity has increased to 117.4 MTPA.

Today, the stock of Ultratech Cement opened at Rs. 4340, up by 1% from its previous close. At 11:47, the stock was trading nearly at Rs. 4311.30 on the BSE.