UltraTech Cement on firm ground, but steep earnings upgrade unlikely

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Subscribe to enjoy similar stories. UltraTech Cement Ltd impressed the Street with stellar volume growth and robust operating performance driven by cost efficiencies in the December quarter (Q3FY25). Domestic sales volume grew around 11% year-on-year to 28.81 million tonnes, beating the industry’s estimated mid-single-digit volume growth during the quarter.

Consolidated sales volumes rose to 30.37 million tonnes. The outlook on demand is upbeat as a recovery is being seen across sectors, including infrastructure and individual home building. Management expects UltraTech to grow in double-digits in FY26 driven by expanded capacities, indicating continued market share gains by beating industry growth of 6-7%.

UltraTech completed the acquisition of south-focused The India Cements Ltd last quarter, while the acquisition of Kesoram Industries Ltd is likely to be completed this quarter (Q4FY25). With that, UltraTech will close FY25 with around 185 million tonnes per annum (mtpa) of cement capacity. By the end of FY27, its total capacity including ongoing expansions will be around 210 mtpa.

Also read: HUL needs a magic wand for recovery after subdued Q3 As UltraTech continues to push the pedal on organic and inorganic expansion, it is seen as a key beneficiary of ongoing industry consolidation despite the elevated competition. Timely capacity expansions provide growth visibility. UltraTech has also invested ₹7,760 crore to acquire a non-controlling 8.42% stake in Northeast-focused Star Cement Ltd.

That said, steep earnings upgrades may not come easily. “We estimate the consolidation of India Cements and Kesoram to drive 21/9% year-on-year volume growth in FY26/27E. However, as these assets’ margins will remain significantly