UltraTech Cement Limited has informed stock exchanges about receiving a significant GST authority order that confirms a tax demand of Rs. 28,96,92,293, along with associated interest and penalty components. The disclosure was made on March 25th, 2026, in compliance with Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements.

GST Order Details

The order was issued by the Deputy Commissioner, State Goods and Services Tax, Maharashtra, and was received by the company on March 24th, 2026. The comprehensive demand structure includes multiple components that significantly increase the total liability beyond the primary tax amount.

Nature of Alleged Violations

The GST order pertains to the acquired cement business of Kesoram Industries Limited and covers financial year 2022-23. The authority has identified several specific contraventions in its assessment of the company's tax compliance.

The alleged violations include:

• Excess Input Tax Credit (ITC) availment
• Ineligible ITC claimed
• Short payment of tax liability

These issues relate specifically to the cement business operations that UltraTech Cement acquired from Kesoram Industries Limited, indicating that the tax matters may have originated from the previous ownership structure.

Company's Response and Financial Impact

UltraTech Cement has indicated its intention to contest the demand through appropriate legal channels. The company's management has assessed the potential financial implications and provided guidance on the expected impact.

According to the company's disclosure, it does not expect the GST order to have any material financial impact on its operations. This assessment suggests that the company either has strong grounds for appeal or sufficient financial resources to manage the potential liability without affecting its core business activities.

Regulatory Compliance

The disclosure was made to both BSE Limited and The National Stock Exchange of India Limited, fulfilling the company's obligations under securities regulations. Company Secretary and Compliance Officer Dhiraj Kapoor signed the disclosure document, ensuring proper corporate governance protocols were followed.

The company also informed international exchanges where its securities are listed, including the Luxembourg Stock Exchange and Singapore Exchange, maintaining transparency across all trading platforms where UltraTech Cement securities are available to investors.

CLSA has reaffirmed its positive stance on UltraTech Cement , maintaining an outperform rating despite acknowledging potential near-term headwinds for the cement manufacturer. The brokerage's confidence stems from the company's pricing power and attractive valuations, even as cost pressures mount from geopolitical developments.

Cost Inflation Challenges

The investment firm has identified several cost pressures facing UltraTech Cement, primarily driven by Middle East-related developments. These inflationary pressures are affecting multiple input categories that are crucial to cement manufacturing operations.

Expected Price Response Strategy

CLSA anticipates UltraTech Cement will implement strategic price adjustments to counter rising input costs. The brokerage expects the company to raise cement prices by 4-5% in response to the $40 per tonne increase in petcoke costs. This pricing strategy reflects the company's ability to pass through cost inflation to customers while maintaining market position.

Valuation and Medium-term Outlook

Despite the near-term earnings risks, CLSA remains optimistic about UltraTech Cement's prospects based on several key factors. The brokerage highlights that the company's enterprise value per tonne (EV/T) metrics are currently at trough levels, suggesting attractive entry valuations for investors.

The investment firm's bullish stance is further supported by UltraTech Cement's demonstrated ability to retain price increases once implemented. This pricing retention capability is viewed as a crucial competitive advantage that should help protect margins as input cost pressures normalize over time.

Strategic Positioning

CLSA's outperform rating reflects confidence in UltraTech Cement's operational resilience and market positioning. While acknowledging the immediate challenges posed by cost inflation, the brokerage believes the company's strategic responses and current valuation levels create favorable conditions for medium-term value creation.