Pan-India-focused UltraTech Cement Ltd. is poised to gain more muscle in FY26. Integration of acquired assets—The India Cements Ltd and Kesoram Industries Ltd—is progressing well. The demand outlook is also upbeat.
The pace of government’s capital expenditure for infrastructure projects in Bihar, Andhra Pradesh, Gujarat and Maharashtra was better in Q1FY26 than last year, the management said. UltraTech expects government capex to generate healthy cement demand.
Consequently, UltraTech is confident of achieving double-digit volume growth in FY26, outpacing the industry’s growth estimate of mid-to-high single digits.
The company’s consolidated grey cement volume grew 9.7% year-on-year to 36.83 million tonnes (mt) in Q1FY26. This includes contributions from acquisitions and sales in the overseas market. Domestic grey cement volume rose 8.7% year-on-year to 34.64 mt. “Like-to-like volumes rose 3% year-on-year, which would be slightly below industry,” said an HDFC Securities report on 22 July.
But expectations are running high. UltraTech could deliver 11% volume CAGR during FY25-27, led by around 9% core volume CAGR and the rest coming from gradual ramp-up of India Cements and Kesoram, estimates HDFC.
Over this time, it estimates UltraTech’s consolidated Ebitda CAGR at 34%, aided by margin expansion for core operations and acquired assets.
Ebitda growth was 46% in Q1FY26 to ₹4,410 crore, broadly in line with consensus expectations. Volumes and market share would also get a leg-up from continued thrust on timely capacity expansions.
UltraTech commissioned 3.5 mtpa (million tonnes per annum) capacity in Q1FY26. It plans to add 11 mtpa in FY26 and another 15 mtpa in FY27, thus increasing its manufacturing capacity to 212.2 mtpa by FY27 from 187 mtpa currently.
UltraTech intends to announce the next phase of its growth plan by FY26-end. The company has earmarked ₹10,000 crore capex for FY26 mainly to scale-up operations and spent around ₹2,000 crore in Q1FY26.
On the flipside, aggressive capex may keep debt elevated in the near term. Amid this, UltraTech continues to maintain a tight leash on costs and target to lower opex by ₹300/mt over the next two-three years. This would be driven by the rising share of green power and reducing lead distance reduction, among other measures.
These positive factors have lent comfort to investor sentiment, even as the sector’s pricing trends are dynamic and could pose a risk. Still, UltraTech shares hit a new 52-week high of ₹12,714 on Monday after Q1FY26 results. Grey cement realisation improved by 2.2% sequentially in Q1FY26 (excluding India Cements).
Price increases were led by the southern and eastern markets with the latter continuing its upward journey in July. Northern and western markets saw stable prices as they were already high. Current cement prices are higher versus Q1FY26 exit prices, the management said and expects cement prices to improve further in FY26.
But as Yes Securities points out, despite a large presence in the southern region (around 53 mtpa, including Kesoram & India Cements), where cement prices rose 13% sequentially in Q1FY26, Ultratech’s realization gain was muted.
This was partly due to brand-related challenges as UltraTech’s pricing for India Cements was not well-accepted in the market, said the Yes Securities report. While all-India average cement prices rose by 5.4% sequentially, despite being a pan-India player, UltraTech did not benefit significantly from the price hike, it added.
Meanwhile, the stock has risen 8.5% so far in 2025, slightly ahead of benchmark index Nifty50’s 6% returns. It trades at FY27 EV/Ebitda of around 18x, showed Bloomberg data. Valuation is a premium to competitors ACC Ltd and Ambuja Cements Ltd.
