Stock Market Research

UltraTech Cement

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by

stockyogi

UltraTech Cement

Structural Return Improvement Drivers

  • Return ratios expected to improve over 3–4 years due to:
    • Higher asset turnover
    • Low-cost capacity expansions
    • Rising profitability through efficiency gains

Strong Volume Growth Outlook

  • Double-digit volume growth guided for FY26
  • Driven by organic capacity additions and recent acquisitions (India Cements, Kesoram)
  • Robust demand from rural housing, urban real estate, and infrastructure

Profitability & Margin Expansion

  • Sequential profitability improved due to:
    • Turnaround of acquired assets
    • Pan-India scale efficiencies
  • Cement prices remain stable despite seasonal impact
  • Cost-saving efforts and integration synergies to support margins

Strategic Expansions & Integration

  • Ongoing organic and inorganic capacity additions will reinforce market leadership
  • Integration of ICEM and Kesoram progressing well, with a focus on productivity

Demand Drivers & Industry Outlook

  • Demand boosted by government-led infrastructure and housing
  • Industry volume growth expected at 7–8%
  • Pricing to remain market-driven and regionally dynamic

Recommendation by Broking Firms (Updated on 25th July 2025)

Issuing CompanyRatingTarget Price
Axis ResearchBuy13840
B&K SecuritiesHold13275
ICICI SecuritiesBuy14600
J M FinancialBuy14150
Motilal Oswal Financial ServicesBuy14600
HDFC SecuritiesBuy12800
Mirae Asset SharekhanBuy14200
Average Target Price14093

Reports

Axis_securities_UltraTech
B&K_UltraTech
HSIE_UltraTech
ICICI Securities_UltraTech
JMF_UTCEM
MOSL_UltraTech
ShareKhan_Ultratech

UltraTech Cement Q1FY26 – Key Highlights

Demand & Volumes

  • Guided double-digit volume growth in FY26, driven by infra push and housing demand.
  • Q1FY26 volume grew 9.7% YoY (including India Cements & Kesoram).
  • Premium cement share rose to 33.8%; trade share at 66.3%.

Pricing & Realisations

  • Grey cement prices up 2.2% QoQ, led by South & East.
  • Blended realisation rose 2.7% YoY; prices expected to remain stable-to-positive.

Capex & Expansion

  • FY26 capex guidance: INR 100bn; INR 20bn spent in Q1.
  • Capacity to rise to 217 mtpa post expansion.
  • RMC plant count at 397, with 20% YoY volume growth.

Costs & Efficiency

  • Fuel cost: INR 1.78/Kcal; lead distance reduced to 370 km.
  • Clinker conversion improved to 1.49x; logistics and fuel costs declined YoY.

India Cements/Kesoram

  • Target EBITDA/tonne of INR 1,000 by FY28 via WHRS, digitization & cost optimization.

Green Energy & Debt

  • Green energy share at 39.5%; aiming 85% by FY30.
  • Net debt at INR 163bn, lower QoQ; funding mix includes internal accruals and debt.