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Informist, Saturday, Oct. 18, 2025

 

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--UltraTech: GST cuts had no impact on Q2 profitability
--CONTEXT: Comments by UltraTech's mgmt in analyst concall post Q2 earnings
--UltraTech: On ground, things are looking up for premium cement
--UltraTech: To complete brand transition for acquired assets by Jun 2026
--UltraTech: Advertising costs were higher in Q2
--UltraTech: Capacity expansion plans in full swing
--UltraTech: Premium cement pricing next 1 year depends on demand, costs
--UltraTech: New approved capacity adds to be evenly spread out FY28 onwards
 

 

By Rajesh Gajra and Akash Mandal

 

NEW DELHI - Maintenance costs for cement kilns that were under shutdown had a dampening effect on the earnings performance of UltraTech Cement Ltd. in the September quarter, Chief Financial Officer Atul Daga said Saturday in a post-earnings conference call with analysts and investors. He said the company operates 56 kilns across the country, excluding nine kilns operated by its subsidiary Indian Cements Ltd.

 

During the September quarter, out of the 56 kilns, the company had 617 kiln days shutdown as compared to 511 kilns days in the year-ago quarter, Daga said. As per the company's internal calculations, this had an impact of INR 100 per tonne, he said.

 

UltraTech, on Saturday, reported a 75% on-year jump in consolidated net profit to INR 12.3 billion. Revenue from operations grew 20% to INR 196.1 billion. While fuel and freights costs were in the company's favour, it reported a 22% on-year rise in other expenses to INR 29.9 billion.

 

The advertising costs were also higher in the September quarter and the company spent INR 500 million "higher than the last quarter resulting in an impact of about 15 rupees (INR 15) per tonne," Daga said. He said such costs will be there in the December quarter as well but the impact will not be high.

 

To a question on whether the operation earnings before interest, tax, depreciation, and amortisation per tonne of INR 755 in the Kesoram Cement assets of the company in the September quarter carried the impact of maintenance shutdowns, Daga replied in the affirmative. The operating EBITDA per tonne was INR 966 in the company's operations after excluding the acquired assets of Kesoram Cement and India Cements.

 

The subsidiary India Cements reported an operating EBITDA per tonne of just INR 386 for the September quarter. In terms of volume, UltraTech's operations, excluding Kesoram and India Cements, was 29.71 million tonnes in the September quarter, while that of Kesoram was 1.7 million tonnes and India Cements was 2.44 million tonnes.

 

The brand transition for the acquired assets of Kesoram Cement and India Cement is still ongoing for UltraTech Cement, and Daga said the company will complete the transition not later than June 2026. He also said that goods and services tax cuts on cement did not impact the profitability of the company in the September quarter.

 

On premium cement, Daga said things were looking up for this segment even better than they were for the regular cement products. But so far as the one-year trajectory on premium cement pricing was concerned, Daga said this would totally depend on the demand and cost pressures.

 

On capacity expansion, Daga said existing projects were in "full swing." On Saturday, the company also announced that it has received board approval to invest INR 102.55 billion on expanding its production capacities by 22.8 million tonnes per year. In a stock exchange filing, the company said that the capacity addition would be by way of integrated and grinding units across the country and will have a mix of brown field and green field projects. Daga said these additional capacities will be evenly spread 2027-28 (Apr-Mar) onwards.

 

Daga said out of the targeted 22.8 million tonnes per year capacity addition, "18 million tonnes is focused on the northern markets and 4.8 million tonnes for the western markets." Daga said UltraTech was embarking on the next phase of its growth with this capacity expansion. "After completing our consolidation in the southern markets in fiscal 25, we have focused our guns on north and west," Daga said.

 

On Friday, shares of the company closed at INR 12,370 on the National Stock Exchange, up 0.1%.  End

 

Edited by Ashish Shirke

 

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