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UltraTech Cem.
Our verdict on UltraTech Cem. isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company delivered efficiency improvements of INR 185 per ton on a nominal basis, significantly exceeding the INR 100 target for the fiscal year. (1 exceeded across 1 tracked commitment)
“My guess is we should be crossing INR100 mark on those efficiency improvement programs in this financial year.”
Management expects Q3 FY26 all-India demand growth to be between 9% and 10%, aligning with the double-digit target. (1 met across 1 tracked commitment)
“Don't hold me to it, but we would expect anywhere between 9% to 10% all-India demand.”
See the full cited Management analysis of UltraTech Cem.
How durable is the business?
Consolidated volume grew 9.7% YoY, reaching 34.64 million tons, driven by government infrastructure spending and a rebound in urban housing. The UltraTech brand specifically grew by 6.5%. (1 expanding)
“Consolidated UltraTech Cement has grown at 9.7% Y-o-Y, including Kesoram in both the periods... It's 34.64 is including India Cements.”
UltraTech brand volumes grew 13.2% YoY, while consolidated volumes including acquisitions grew 6.8% YoY despite heavy monsoon rains. (1 expanding)
“Firstly, demand. I think it's very important to note that we have sold more than 31 million tons of cement this quarter... With both ICL and Kesoram Cement assets in the base, we have grown about 6.8%.”
See the full cited Business Model analysis of UltraTech Cem.
Where does growth come from?
UltraTech is maintaining an aggressive expansion trajectory, with 14.1 mtpa planned for FY26 and 15.1 mtpa for FY27. The company has revised its FY27 target upward from 14.7 mtpa to 15.1 mtpa, indicating an acceleration in capacity building. (3 accelerating, 2 steady across 5 signals, 1 leading indicator)
“UltraTech crossed 200 million tons of cement production capacity in India... Our next horizon is already set. We have committed to add a further 37 million tons, which will take us over 242.5 million tons in a phased manner by fiscal '28.”
UltraTech has initiated a comprehensive efficiency program for India Cements (ICL) assets, including upgrading preheaters and installing 21.8 MW of Waste Heat Recovery Systems (WHRS) to drive profitability. (2 new trend, 2 accelerating, 1 steady across 5 signals)
“Brand migration - 100% brand migration has been completed at the end of March '26. In second quarter fiscal '26, 31% of ICL volumes and 55% of Kesoram volumes were carrying UltraTech brand... We have completed at the exit of March '26, 100% brand conversion.”
See the full cited Future Growth analysis of UltraTech Cem.
What could break the thesis?
EASING. Fuel costs per metric ton declined 14% year-over-year and 1% sequentially. Logistics costs also fell 4% year-over-year due to reduced lead distances (370km vs 386km). (3 easing, 1 stable, 1 intensifying, 1 high-severity)
“Whilst I have given an indicative chart in our presentation on where the impact of these rising prices could be, let's be straightforward, it's a real headwind on fuel costs, packing bags and freight, on certain import-dependent supply chains”
The company faces significant non-cash losses due to the devaluation of the Indian Rupee against the US Dollar, impacting the valuation of unhedged foreign currency borrowings. [MARGIN_COST]
“the fact is the way rupee devaluated, I have $950 million of foreign currency borrowings fully hedged. But when you have to do a mark-to-market, you have to take the impact of that currency into account. It hits your EBITDA. INR94.85 was the rupee to dollar 31st March.”
See the full cited Risk analysis of UltraTech Cem.
Read the full thesis on UltraTech Cem.
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