UltraTech Cement: Building Strong Foundations in Q2 FY26

UltraTech Cement Limited, a leading player in the Indian cement industry, has announced its financial results for the second quarter of fiscal year 2026. The company reported a consolidated revenue from operations of INR 1,117 crore, demonstrating resilience and growth despite challenging market conditions. The EBITDA for the quarter stood at INR 110 crore, with a Profit After Tax (PAT) of INR 9 crore. These figures reflect the company's ability to navigate operational complexities while integrating recent acquisitions and pursuing aggressive expansion.

The quarter saw UltraTech achieve a domestic sales volume of 2.44 million tons, marking an impressive 11.9% growth quarter-on-quarter. This growth was significantly bolstered by the successful brand transition of acquired assets, with India Cements' brand conversion reaching 31% and Kesoram's at 55%. This rapid integration contributed to a 13.2% year-on-year growth for the UltraTech brand. The company's average capacity utilization for the quarter was 65%. While net cement realizations saw a marginal decline of 0.6% quarter-on-quarter, the overall sales performance remained strong, particularly in rural markets, which delivered a robust 13% growth.

UltraTech's strategic initiatives are clearly focused on both growth and sustainability. The company has outlined a capital expenditure plan of INR 2,000 crore over the next two years, primarily aimed at growth and efficiency improvements. Key projects include the conversion of 4/5 stage preheaters to 6 stage preheaters, cooler upgradation, and process optimization to reduce heat consumption. A significant investment is also being made in green energy, with plans to install 21.8 MW of Waste Heat Recovery Systems (WHRS) and other renewable energy projects. The ambitious target is to scale up green power (Renewable Energy + WHRS) from 5% to 80% by FY28.

In terms of capacity expansion, UltraTech is on track to reach 200 million tons of capacity by the end of the current financial year. The company is further embarking on a new phase of growth, adding 22.8 million tons of incremental capacity, with a strong focus on the Northern (18 million tons) and Western (4.8 million tons) markets. This expansion is expected to increase clinker capacity to 148 million tons, achieving a clinker conversion factor close to 1.6x. Additionally, UltraTech is diversifying its business by launching a 'Cables and Wires' segment, with production expected to commence in Q3 CY '26.

While the quarter saw some cost increases, particularly in maintenance, advertising, and staff expenses, management anticipates a normalization of these costs in the upcoming quarters. The reduction in Clean Energy Cess levy on coal, a benefit from GST 2, is also expected to positively impact profitability. UltraTech's disciplined capital allocation, strategic expansions, and strong focus on green initiatives underscore its commitment to long-term value creation and sustainable growth. The company's ability to integrate acquisitions effectively and drive brand growth positions it well for continued leadership in the Indian cement sector.