UltraTech Cement , India's leading cement manufacturer, has reported a strong start to the fiscal year, with consolidated volume growth of 9.7% year-on-year in the first quarter. The company's performance, which includes the recently acquired Kesoram Industries' cement business, signals a positive outlook for the cement sector amid ongoing infrastructure development in the country.

Volume Growth and Market Performance

UltraTech achieved total sales of 34.64 million tons during the quarter, with the UltraTech brand specifically growing by 6.5% year-on-year. The company's flagship brand has shown resilience and market acceptance, even as it integrates new acquisitions into its fold.

India Cements, another recent addition to UltraTech's portfolio, contributed 2.18 million tons to the overall volume. The management expressed confidence in improving India Cements' operations, targeting an EBITDA of over ₹1,000.00 per ton by FY28 through strategic capex programs.

Pricing and Regional Performance

Cement prices saw a 2.2% sequential increase, with the South and East regions showing maximum gains. This price improvement, coupled with volume growth, indicates a strengthening market position for UltraTech across its operational territories.

Operational Highlights and Future Outlook

UltraTech's management highlighted several key operational improvements:

1. India Cements Integration: The company is rapidly integrating India Cements operations, which recorded an EBITDA of ₹400.00 per ton after accounting for limestone royalty of ₹160.00 per ton in Tamil Nadu. UltraTech is focusing on efficiency improvements through capex in WHRS (Waste Heat Recovery System), speed modifications, and renewable energy installations.

2. Expansion Plans: UltraTech plans to add close to 10 million tons more capacity in the coming months.

3. Building Products Division Growth: Revenue from the building products division grew to ₹275.00 crores from ₹185.00 crores in the previous year, indicating diversification of revenue streams.

Financial Performance

The company reported that its finance costs decreased, with the average borrowing cost at 7%. This reduction in finance costs, coupled with volume growth and price improvements, suggests a positive trend in profitability.

Future Outlook

UltraTech's management expressed optimism about future growth prospects:

1. Double-Digit Growth Target: The company is targeting double-digit volume growth for the full year.
2. Capex Plans: UltraTech plans a capex of approximately ₹10,000.00 crores to support its growth initiatives.

Industry Outlook

The cement industry's growth is expected to be driven by continued government spending on infrastructure projects, including roads, ports, and urban development initiatives.

UltraTech Cement's strong performance in the first quarter and its ambitious growth plans underscore the company's confidence in India's infrastructure and construction sectors. As the company continues to integrate its acquisitions and expand capacity, it remains well-positioned to capitalize on the country's growing cement demand.

UltraTech Cement , the flagship cement company of the Aditya Birla Group, has reported robust financial results for the first quarter, showcasing significant growth across key metrics.

Financial Highlights

UltraTech's consolidated net sales for Q1 stood at ₹21,040.00 crores, marking a 13% increase from ₹18,626.00 crores in the corresponding period of the previous year. The company's profit before interest, depreciation, and tax (PBIDT) surged by 44% to ₹4,591.00 crores. Notably, profit after tax (PAT) witnessed a substantial jump of 49%, reaching ₹2,226.00 crores.

Operational Performance

The company's consolidated sales volumes reached 36.83 million tonnes for the quarter, representing a robust growth of 9.7%. This growth was primarily driven by the acquisitions of The India Cement Limited and the cement business of Kesoram Industries Limited.

UltraTech's operational efficiency improvements were evident in its cost management:

• Energy costs decreased by 12% year-over-year, mainly due to reduced fuel prices.
• Raw material costs saw a marginal increase of 2%.

India Cements Turnaround

A significant highlight of the quarter was the successful turnaround of India Cements, which became a subsidiary of UltraTech effective December 25, 2024. Comprehensive efforts across multiple fronts enabled India Cements to generate an EBITDA of ₹92.00 crores, compared to a loss of ₹9.00 crores in the previous year. Through debottlenecking, an additional capacity of 0.3 million tonnes per annum was released from India Cements assets in the northern region.

Sustainability Initiatives

UltraTech continues to make strides in its sustainability efforts:

• The company was ranked 9th in the Global Sectoral Ranking of the S&P Dow Jones Sustainability World Index for 2024, marking its fourth consecutive year in the top 10 in the Construction Material sector.
• UltraTech commenced 12 MW of Waste Heat Recovery System (WHRS) capacity during the quarter, augmenting its total WHRS capacity to 363 MW.
• The share of green power in the company's power mix increased to 39.5%.

Capacity Expansion

UltraTech's expansion program is progressing as scheduled:

• The company increased its grey cement capacity by 3.5 million tonnes per annum in Q1.
• Total capacity now stands at 192.26 million tonnes per annum.

Management Commentary

K.C. Jhanwar, Managing Director of UltraTech Cement, stated, "UltraTech has once again showcased its prowess in revitalizing cement assets, overcoming various challenges and setting new benchmarks in the industry. Our strong performance this quarter reflects our commitment to operational excellence and sustainable growth."

UltraTech Cement continues to solidify its position as the third-largest cement producer globally, outside of China, with a total grey cement capacity of 192.26 million tonnes per annum and white cement/putty capacity of 2.7 million tonnes per annum. The company remains committed to contributing to India's economic development while focusing on sustainability and operational efficiency.