India's UltraTech Cement expects another quarter of slow growth

UltraTech Cement, India's No.1 cement maker, reported first-quarter earnings below estimates on Friday, hurt by soft demand and muted prices amid intensifying competition, and said growth would pick up only next quarter. Cement prices were hovering around more-than-three-year lows from April to June as attempts to raise prices were stymied by soft demand and an aggressive fight for market share, analysts said. Prices have softened sequentially in July and will likely only start improving from October onwards, Atul Daga, UltraTech's finance chief, said in a post-earnings call. The company's first-quarter profit and revenue both came below analysts' average estimates, according to LSEG data. Its revenue growth of 2% was the slowest in at least five quarters due to an election-linked slowdown in government construction spending. Sales volumes increased 6%, on the lower end of the 5%-11% band estimated by analysts. UltraTech has been fighting to protect its market share, especially from the billionaire Adani Group which has risen to the No.2 spot in just two years via multiple big-ticket acquisitions. The Aditya Birla Group-backed UltraTech has taken the same route, with its last deal being buying a 23% stake worth up to $228 million in India Cements last month. There was speculation UltraTech could increase its stake but Daga, on Friday, said it "can't go beyond" that 23% stake. UltraTech's shares ended 3.3% lower after the results.

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