UltraTech Q3 net drops

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Leading cement maker, UltraTech Cement, which reported a sharp drop of
17.76% in standalone net profit on Saturday for the quarter ended December
2009, expects the industry demand to grow over 10% on the back of
government initiative to boost rural development, infrastructure and housing.

During the quarter, the profit of the company declined 17.76% to Rs
1,960.30 million from Rs 2,383.60 million in the same quarter previous year.

The profit was down, owing to the slowdown in demand growth in the
markets of Southern India, which constituted around 30% of the company`s
sales. This also coincided with the commissioning of new capacities in the
South with a consequent fall in cement prices.

Net sales for the quarter for the quarter rose marginally 2.36% to Rs 16,693
million, while total income for the quarter rose marginally 2.25% to Rs
16,817.60 million, when compared with the prior year period.

The quarter also witnessed a drop in clinker export realisation due to
reduced off-take in the Middle East following a meltdown in construction
activities. These factors cumulatively impacted the company`s margins, it
said.

It expects the industry will witness a surplus scenario over the next 18 to 24
months resulting in a pressure on margins. Its focus on higher volume
growth together with cost efficiency offset the impact on margins.