CFO Atul Daga outlines long-term expansion roadmap, energy transition plans, and demand tailwinds from infra and housing, as UltraTech posts robust Q2 performance.
UltraTech Maps Long-Term Growth Beyond FY29
India’s largest cement producer, UltraTech Cement, is building momentum for its next growth phase, with CFO Atul Daga confirming scope to expand capacity by an additional 25 million tonnes per annum (MTPA) beyond the current 240.8 MTPA roadmap.
- Current capacity plan of 240–245 MTPA is targeted for completion by FY2029.
- Additional growth of 20–25 MTPA is possible post-2029, depending on market dynamics.
- Expansion is focused on northern and western India, following consolidation in the south.
“We are now stitching our program to reach about 240–245 million tonnes… There is definitely scope for 20–25 million tonnes more beyond that,” said Daga.
Increasing Clinker Conversion, Green Energy Push
UltraTech is also enhancing operational efficiency by raising its clinker conversion ratio to 1.6x, a move aimed at improving output without proportionately increasing clinker capacity.
- Higher clinker conversion allows for greater cement output from the same base.
- The company is aggressively investing in renewable energy and Waste Heat Recovery Systems (WHRS).
- 65% of energy is expected to come from green sources by the end of the current capex cycle.
This aligns with UltraTech’s ESG goals, and makes operations more cost-efficient and sustainable in the long run.
Robust Demand Outlook Driven by Infrastructure and Housing
Cement demand remains resilient, with both rural and urban drivers strengthening:
- Rural demand is growing at a 10% pace, supported by a strong monsoon and higher MSPs.
- Urban consumption is accelerating due to tax reforms and easier credit access.
- Major infrastructure projects such as Vadhavan Port, Mumbai Airport-linked real estate, and Google’s $15 billion AI hub in Andhra Pradesh are seen as multi-year demand enablers.
“Such mega projects are very positive for cement industry for consistent growth,” Daga said.
Strategic Benefits from GST and Brand Premiumization
The rollout of GST 2.0 is offering UltraTech indirect benefits:
- Reduction in clean energy levies on coal improves cost dynamics.
- Lower GST makes premium cement brands more accessible, aiding UltraTech’s brand premiumization strategy.
“Some people will be able to buy their aspirational brands,” Daga said, underscoring potential demand uplift at the premium end of the market.
Q2 Highlights: Strong Growth Amid Temporary Margin Pressure
UltraTech reported a Q2 FY26 net profit of ₹1,232 crore, a 75% YoY jump, with revenue up 20% to ₹19,607 crore.
- Over 31 million tonnes of cement were sold in the quarter.
- The UltraTech brand grew 13.2%, supported by rural and real estate demand.
- Rapid integration of India Cement and Kesoram assets is on track, with full transition expected by June 2026.
However, margins were impacted by:
- Planned maintenance,
- Employee bonuses,
- Higher advertising spend (~₹200/tonne).
Daga expects partial reversal of these pressures in the following quarter.
Stable Fuel Costs Support Profitability
Fuel costs, a key input in cement production, are expected to remain stable:
- Higher use of coal is offsetting petcoke price pressures.
- This supports margin resilience, even amid expansionary spending.
UltraTech Cement is progressing toward a 240–245 MTPA capacity target by FY29 and sees scope for an additional 25 MTPA expansion. With rising clinker efficiency and a shift to green energy, the company is well-positioned to benefit from robust housing and infrastructure demand. Q2 FY26 saw strong top- and bottom-line growth, despite one-off cost pressures.