Ultratech hosted a conference call on April 28, 2023. In the conference call the company was represented by Mr Atul Daga -CFO.

Key takeaways of the call

The company reached the landmark of clocking 100 MT volumes in FY23 and continued to gain market share.

Capacity utilization has increased to 94% in Q4FY23; with March 2023 registering 100% capacity utilization. Similar momentum has continued in April 2023.

Trade mix stood at 66%. Blended cement stood at 69% in Q4FY2023 and 70% in FY2023.

Other expenses were lower due to operating leverage benefit kicking in.

Construction Chemicals revenue stood at Rs 550 cr in FY2023. The company has 39 contract manufacturing plants.

Clinker conversion ratio stood at 1.42x in FY2023 and expects the same to rise to 1.5x if infra-projects starts accepting blended cement.

Fuel:

Blended fuel consumption was at US$194/t in Q4FY23compared to US$200/t in Q3FY23.

While current pet coke prices have softened to US$ 150/t, US coal prices continue to stay at elevated levels of US$175-180/t. The company expects coal prices to remain high as CHINA has still not commenced importing coal.

Pet coke consumption increased to 52% vs. 43% in Q3FY23 and the share could increase further in the ensuing quarters.

The benefit of lower fuel prices is likely to reflect in the next two months.

The company continues to maintain 40-45 days of inventory.

Fuel cost/ kcal as compared to peers is higher as company delivers more to infra projects & hence OPC supply is higher than peers

Lead Distance: Lead distance for Q4FY23 stood at 413 km same as Q3FY23.

Green Power: Green Power share in Q4FY23 stands at 25%, which includes 15% WHRS & rest from renewable sources. All newly commissioned plants have 55% WHRS

CAPEX:

The company implemented capacity expansion in 2 phases. Phase 1 is almost complete except 2.1 mtpa which is pending and is expected to be completed by June 2023. Phase 2 capacity expansion is on track (22.6 MT) and expects it to be commissioned by June 2025 (FY26).

Company currently has 7 bulk cement terminals with phase 2 expansion, 2 more cement terminals are expected to build in states of Uttar Pradesh & Karnataka, also 300 railway sidings are currently operating.

The company has incurred around Rs 6000 cr CAPEX in FY2023 and plans to incur similar amount for next 2-3 years.

Outlook:

The demand continues to be robust and the management expects the healthy momentum to sustain in Q1FY24.

There is no significant expectation of price hikes in the near term and expect the prices to remain stable in FY2024.

Dividend: The Board of Directors have recommended a dividend of Rs 38 per equity share.