UltraTech Cement Receives Credit Rating Reaffirmation from CARE Ratings
CARE Ratings Limited has reaffirmed UltraTech Cement Limited's 'CARE AAA; Stable / CARE A1+' credit rating for bank facilities worth ₹17,100 crore, while withdrawing the fixed deposit rating due to full repayment. The reaffirmation reflects the company's sustained market leadership in India's cement industry, with installed capacity of 188.66 MTPA as of December 31, 2025, and overall grey cement capacity of 194.06 MTPA including overseas operations. UltraTech's strong financial performance shows net sales growth of 14% CAGR over five years, reaching ₹74,936 crore in FY25, supported by integrated operations and expanding green energy initiatives targeting 60% renewable power mix by FY27-end.
*this image is generated using AI for illustrative purposes only.
UltraTech Cement Limited has received a credit rating reaffirmation from CARE Ratings Limited, maintaining its strong financial position in India's cement industry. The rating agency has reaffirmed the company's 'CARE AAA; Stable / CARE A1+' rating for its bank facilities while withdrawing the fixed deposit rating due to full repayment.
Rating Details and Facility Overview
CARE Ratings Limited has reaffirmed ratings on bank loan facilities totaling ₹17,100 crore, reflecting the company's robust financial profile and market leadership position. The rating action covers various facility types with specific amounts and ratings.
| Facilities/Instruments | Amount (₹ crore) | Rating | Rating Action |
|---|---|---|---|
| Long-term bank facilities | 2,400.00 | CARE AAA; Stable | Reaffirmed |
| Long-term / Short-term bank facilities | 14,700.00 | CARE AAA; Stable / CARE A1+ | Reaffirmed |
| Fixed deposit | - | - | Withdrawn |
The withdrawal of the fixed deposit rating occurred because the company has repaid these deposits in full, with no outstanding amount remaining as of the rating date.
Market Leadership and Capacity Expansion
UltraTech maintains its position as India's largest cement manufacturer with an installed cement capacity of 188.66 million tonne per annum (MTPA) as of December 31, 2025. Including its 5.4 MTPA overseas cement capacity in UAE, the company's overall grey cement capacity stands at 194.06 MTPA.
The company is undertaking significant capacity expansion under its ongoing plans, with installed capacities expected to rise to 240.8 MTPA by FY28. This expansion includes the next phase of 22.8 MTPA capacity addition through a mix of brownfield and greenfield projects, with work progressing as scheduled.
Financial Performance and Operational Metrics
UltraTech's financial performance demonstrates strong operational leverage and market position. The company's net sales have grown at a 14% compound annual growth rate over the last five fiscal years through FY25, reaching ₹74,936 crore.
| Financial Metrics | March 31, 2024 | March 31, 2025 | 9MFY26 |
|---|---|---|---|
| Total operating income (₹ crore) | 70,028 | 75,955 | 62,712 |
| PBILDT (₹ crore) | 12,074 | 12,557 | 11,910 |
| Profit after tax (₹ crore) | 7,004 | 6,040 | 5,188 |
| Overall gearing (x) | 0.32 | 0.50 | NA |
| Interest coverage (x) | 12.66 | 7.61 | NA |
For 9MFY26, net sales increased by approximately 19% year-on-year to ₹62,712 crore, compared to ₹52,891 crore in 9MFY25. EBITDA rose to ₹11,910 crore from ₹7,945 crore, while EBITDA margins expanded to approximately 19% from 16%.
Operational Strengths and Integration
The rating reflects UltraTech's sound operating efficiencies supported by highly integrated operations. The company maintains adequate limestone reserves in its captive mines, captive coal blocks, and a strong distribution network consisting of 34,000+ dealers, 100,000+ retailers, and 3,950+ UltraTech Building Solutions outlets.
UltraTech operates captive thermal power plants of 1,333 MW, Waste Heat Recovery Systems of 383 MW, and renewable energy capacity of 1.28 GW. The company has increased its low-cost green power mix to 33% in FY25 and further to 42.1% in 9MFY26, targeting 60% by FY27-end as part of its sustainability initiatives.
Risk Factors and Industry Challenges
Despite these strengths, CARE Ratings notes that UltraTech remains exposed to cyclicity in the cement industry and volatility in input costs and realisations. Ongoing geopolitical tensions may lead to volatility in pet coke prices, though the impact is partly mitigated by sufficient raw material availability for 3-4 months of operations.
The company's liquidity position remains strong, supported by healthy cash and cash equivalents of ₹5,106 crore as of December 31, 2025, significant generation of gross cash accruals, and moderate bank limit utilisation. The stable outlook indicates expected sustenance of market leadership and strong credit metrics going forward.
Historical Stock Returns for UltraTech Cement
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.23% | +9.12% | +1.85% | -4.95% | +1.68% | +69.78% |
How will UltraTech's ambitious capacity expansion to 240.8 MTPA by FY28 impact cement pricing dynamics and competitive positioning in the Indian market?
What potential challenges could UltraTech face in achieving its target of 60% green power mix by FY27-end, and how might this affect operational costs?
How might ongoing geopolitical tensions and pet coke price volatility impact UltraTech's margins despite their 3-4 month raw material buffer?
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