Cost Optimisation Driving Margins

There is a reason as to why most brokerages continue to be bullish on the prospects of Ultratech Cement, India’s largest manufacturer of grey, ready mix concrete (RMC) and white cement. The company’s stellar performance for the first quarter (Q1) of financial year (FY) 2020 has surprised the street. Its consolidated net profit in Q1 FY2020 saw a whopping 91 per cent growth, standing at Rs1,208 crore as compared to Rs631 crore last year. The impressive show came mainly on the back of better realisation and lower operational cost. Ultratech’s net sales and profit clocked a compounded annual growth rate (CAGR) of nine per cent and three per cent respectively over FY2015 -19. The company’s net sale grew by 15 per cent at Rs10,027 crore in Q1 FY2020 from Rs8,720 crore in Q1 FY2019. The sales growth was driven by an increase in its premium products segment, which...