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Cement Sector – Operational performance remained better on YoY basis

ICICIdirect Research 30 Apr 2026 DISCLAIMER

In cement sector, two major companies (UltraTech Cement and Dalmia Bharat) reported its Q4FY26 results during this week. Overall operational performance of Ultratech was better than expectations where as it was largely in line for Dalmia Bharat
Demand improved considerably during the quarter, led by pick-up in housing and rural activities. During Q4FY26, UltraTech reported 9% YoY growth in volumes while Dalmia’s volume growth was muted at ~3% YoY (primarily due to break down in one of its plants)
For full year FY26, Ultratech’s volume growth remained strong ~14% YoY mainly led by improvement in utilisation of India Cements and ramp-up of recently added capacities. Dalmia’s volume growth for FY26 stood at ~2% YoY as management remained focused on profitability rather than volume push
In terms of realisation, UltraTech’s blended realization improved by ~3% QoQ in Q4 (led by better product mix and further brand transitioning of India Cements). Dalmia’s realisation remained flattish QoQ
EBITDA/ton for UltraTech Cement grew ~11% YoY at Rs 1253/ton in Q4 and ~17% YoY at Rs 1103/ton for full year FY26. Dalmia’s EBITDA/ton stood at Rs 1025/ton (+11.2% YoY) in Q4FY26 and Rs 1028/ton (+25.5% YoY) for full year FY26
Going forward, we expect volume growth for both the companies to remain healthy over the next two years (~11% CAGR for UltraTech and ~9% CAGR for Dalmia). Management of both the companies also stated that volume growth would remain better-than-industry.
Companies have also taken cement price hikes by Rs 10-15/bag to mitigate the recent increase in costs (mainly fuel and packaging). Though the sustainability of these hikes needs to be monitored over the coming days
We have also factored in some impact of this rise in input costs. However, we believe that overall operational performance would improve over FY27-28E, led by healthy volume growth and companies’ focus on operational efficiencies
We have reduced our target prices on both the companies but maintained BUY ratings
UltraTech Cement – TP ₹13,880, Dalmia Bharat – TP ₹ 2,370

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