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Informist, Monday, Apr. 27, 2026

 

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--UltraTech: To add 37 mln tn, cross 240 mtpa capacity by FY28 
--CONTEXT: UltraTech Cement mgmt's comments in post-earnings analyst concall 
--UltraTech: Meet 43% of power needs via green energy, to touch 85% by 2030 
--UltraTech: Expect sustainable volume growth of 7-8% 
--UltraTech: To announce growth beyond 240 mtpa next year 
--UltraTech: See INR 80 bln-INR 100 bln in capex every year till 2030 
--UltraTech: Don't see impact of fuel, power costs in Apr-Jun 
--UltraTech: On track to launch cables, wires business by Oct-Dec 
--UltraTech: Business in UAE picking up, no fall in demand 
--UltraTech: No crisis of pet coke availability in India 
--UltraTech: Price hikes by industry enough to meet current cost shortfall 
--UltraTech: Targeting double-digit volume growth in FY27

 

By Astha Oriel and Sunil Raghu

 

NEW DELHI – UltraTech Cement Ltd. is targeting capital expenditure of INR 80 billion to INR 100 billion every year till the financial year 2029-30 (Apr-Mar), a top executive of the company told analysts in a post-earnings call Monday.

 

"We see a plan of investing around INR 8,000 crore (INR 80 billion) to INR 10,000 crore (INR 100 billion) every year for the foreseeable future," Atul Daga, business head and chief financial officer, told analysts and investors on the call. "Future capex (capital expenditure) pipeline remains fully funded and the growth story is intact."

 

The country's largest cement manufacturer plans to add 37 million tonnes in capacity and aims to cross 240 million tonnes per annum in capacity by FY28. "Our next horizon is already set. We have committed to add a further 37 million tonnes, which will take us over 242.5 million tonnes in a phased manner by FY28," Daga said, adding that the company will announce growth beyond 240 million tonnes per annum in FY28.

 

For FY26, the company's consolidated sales volume was 154.25 million tonnes, up nearly 9%. In FY27, UltraTech expects its domestic grey cement capacity to reach 207.3 million tonnes per annum, rising further to 237.1 million tonnes per annum in FY28, the company had said in its investor presentation. The company plans to add capacity of 15.9 million tonnes in FY27 and 29.8 million tonnes in FY28, as per the investor presentation.

 

While the company did not see any immediate impact from rising fuel prices owing to sufficient inventories in the March quarter, the cost of packaging became a crisis in March. "Our incremental cost on bags was approximately INR 90 crores (INR 900 million), which is reflected in other costs for the quarter, on account of bag prices... going up," Daga said. UltraTech has 150 suppliers of cement bags within the country.

 

The company, however, does not see any impact of fuel and power costs in the June quarter. "Prices are going up, which is a reality," Daga said. "Selling prices have also been increased to cushion the impact of rising input costs." In the March quarter, the expense for power and fuel was up nearly 4% on year to INR 54.16 billion and accounted for nearly 25% of the total expenses. The company currently meets nearly 43% of its power requirement through green energy and aims to increase this contribution to nearly 85% by 2030.

 

To manage fuel inventory amidst the West Asia crisis, the company has taken mitigating measures such as diversifying its sources of procurement, identifying new opportunities to deal with the situation, and doing long-term contracts for fuel that will be more beneficial, Daga said. The company is targeting double-digit volume growth in FY27. UltraTech currently has fully hedged $950 million as foreign currency borrowings, Daga added.

The company sees no crisis in the availability of petroleum coke or cement bags in India. "Our dispatchers have not suffered at any location in the country," Daga said. According to the chief financial officer, there is no slowdown in cement demand in the country. UltraTech Cement says the industry is likely to have grown at 6-7% in the March quarter.

 

"We have taken price increases for cement. Industry has taken price increases for cement in the month of April. And, by and large, we don't see a slowdown in demand," he said. "Too much of heat because of which there is a slowdown. West Bengal and Tamil Nadu elections resulted in a slowdown just before the past 15 days. But, generally, the undercurrent remains strong." According to Daga, the price hikes by the cement industry are enough to meet the current rise in costs.

 

For its international operations, UltraTech Cement said volumes are picking up in the United Arab Emirates despite the West Asia crisis. "Prices have not fallen. And knowing how the UAE economy is, it will be the first one to turn the leaf, come up with some new programmes for reviving the economy," Daga said.

 

The company is on track to enter the wires and cables business by the December quarter, the business head said. UltraTech had approved an investment of INR 18 billion for the business and till March it had spent INR 7.64 billion. "We have committed Q3, we might launch it in the first month of Q3 instead of waiting for December," he said.

 

For the India Cements business, UltraTech has committed INR 4 billion in capital expenditure to expand capacity. "This is going to take us (India Cements) over INR 1,000 per tonne (earnings before interest, tax, depreciation, and amortisation) as committed by the end of FY28," Daga said. UltraTech has also invested between INR 4 billion and INR 5 billion in its Kesoram Cement business. "They (Kesoram Cement) are already operating at (an EBITDA of) INR 1,000 per tonne, more or less in line with the other cement operations in the South."

 

Daga said these two assets today represent about 30% of UltraTech's consolidated capacity. "They are moving from integration drag to earnings contributor," he said. "As the cost improvement capital expenditure matures, they will be a meaningful and growing source of group-level EBITDA accretion... Cost improvements are underway and profit and loss statement from FY27 will start reflecting the benefits of this investment."

 

For FY27 and beyond, the company expects sustainable volume growth of 7-8% per annum, Daga said, adding that the structural drivers for this are firmly in place.

 

UltraTech's consolidated net profit for the March quarter was INR 29.83 billion, up more than 20% on year and nearly 73% sequentially. The consolidated net sales were INR 257.99 billion, up nearly 12% on year and over 18% sequentially. Monday, its shares closed largely unchanged at INR 12,010 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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