UltraTech Cement, India's largest cement manufacturer, has reported strong sales of over 31 million tons in Q2 FY26, defying the impact of heavy monsoons. The company also unveiled ambitious expansion plans, signaling confidence in the country's growing cement demand.

Q2 FY26 Performance Highlights

UltraTech's performance in the second quarter of fiscal year 2026 was marked by resilient growth across various metrics:

• Overall sales volume growth: 6.80% (including all acquisitions)
• UltraTech brand growth: 13.20% year-on-year
• Rural market growth: 13.00%

The company's growth rates varied when excluding recent acquisitions:

• 22.30% growth excluding India Cements Limited (ICL) and Kesoram
• 9.60% growth excluding India Cements

Financial Performance

While specific financial figures were not provided, the company shared insights into its operational efficiency:

• Existing assets (166.76 million tons capacity) achieved EBITDA of INR966.00 per metric ton
• India Cements assets delivered EBITDA of INR386.00 per metric ton
• Kesoram assets reached EBITDA of INR755.00 per metric ton

Expansion and Integration Progress

UltraTech has made significant strides in integrating its recent acquisitions:

• India Cements brand conversion: 31.00% completed
• Kesoram brand conversion: 55.00% completed

The company aims to complete the brand transition for these acquired assets by June 2026.

Major Expansion Announcement

UltraTech announced plans to add 22.80 million tons of incremental capacity:

• 18.00 million tons focused on Northern markets
• 4.80 million tons for Western markets

This expansion, primarily through brownfield projects, is expected to be completed by fiscal year 2029. The company plans to fund this growth largely through internal accruals.

Operational Insights

UltraTech provided several operational details:

• Operates 65 kilns across the country
• Experienced higher maintenance costs due to 617 kiln shutdown days in Q2
• Fuel mix: 48.00% coal and 44.00% pet coke
• Fuel costs increased to INR1.80 per Kcal from INR1.78 per Kcal in the previous quarter

Market Outlook

The company expressed optimism about cement demand, citing various factors:

• Robust rural market growth
• Ongoing and upcoming infrastructure projects
• Positive impact of GST changes on premium cement demand

UltraTech expects to reach a capacity of 200 million tons by the end of the current financial year and aims for a 65.00% green power mix in its operations.

Conclusion

Despite challenging weather conditions, UltraTech Cement has demonstrated strong performance in Q2 FY26. With its ambitious expansion plans and ongoing integration of acquired assets, the company is positioning itself to capitalize on India's growing cement demand. The focus on operational efficiency, brand conversion, and sustainable practices underscores UltraTech's commitment to maintaining its leadership in the Indian cement industry.

India Cements Limited , a major player in the Indian cement industry, has announced a significant investment plan aimed at expanding its production capacity and modernizing its operations. The company's board of directors has approved a capital expenditure of ₹4,400 crore, signaling a strong commitment to growth and operational efficiency.

Expansion Details

The investment plan includes:

• A capacity expansion of 2.80 Million Tonnes, increasing the company's total capacity from 14.75 Million Tonnes to 17.55 Million Tonnes
• An investment of ₹440.00 crore specifically for capacity expansion
• An additional ₹1,574.00 crore allocated for modernization efforts

Project Timeline and Financing

• The proposed capacity addition is expected to be completed within approximately two years
• The company plans to finance this project through a mix of debt and internal accruals

Strategic Rationale

India Cements stated that this investment is aimed at:

1. Preparing for upcoming business opportunities
2. Improving the company's competitive positioning in the market

Operational Turnaround Strategy

In addition to the investment plan, India Cements has outlined a comprehensive operational turnaround strategy aimed at restoring profitability and strengthening market share by FY27. The company's plan focuses on three key areas:

1. Capacity expansion
2. Efficiency upgrades
3. Debottlenecking operations

These initiatives are designed to improve the company's operational performance and competitive position in the cement market.

Current Operations

• The company's existing capacity utilization ranges from 60% to 75%
• This expansion will allow India Cements to meet growing demand more effectively

Financial Context

While the company is making this significant investment, it's worth noting some recent financial performance indicators:

• For the quarter ended September 30, India Cements reported a consolidated revenue from operations of ₹1,117.04 crore
• The company posted a net profit after taxes of ₹8.82 crore for the same quarter

Industry Implications

This substantial investment by India Cements suggests confidence in the future growth of India's infrastructure and construction sectors. It also indicates the company's proactive approach to maintaining its market position in a competitive industry.

The expansion, modernization efforts, and operational turnaround strategy are likely to enhance India Cements' production efficiency and could potentially lead to improved profitability in the long term, subject to market conditions and successful implementation of the plans.

As the cement industry is closely tied to economic growth and infrastructure development, this move by India Cements may be seen as a positive indicator for the broader Indian economy.