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UltraTech Cement – Robust volume growth, cost efficiencies led to healthy performance

ICICIdirect Research 30 Jan 2026 DISCLAIMER

Company reported revenue growth of ~23% YoY in Q3FY26, mainly led by strong volume growth of 28% YoY. This was mainly on account of consolidation of India Cements from Q1FY26 onwards. Like-to-like volume growth of 15% YoY was also healthy and better-than-industry, led by ramp-up of new capacity additions and improving utilisation levels of Kesoram Industries. 9MFY26 volume growth was also at 19.4% YoY
Blended realisation also improved by ~7% YoY, led by brands conversion of India Cements and Kesoram Industries. However, realisation is down ~3% QoQ, mainly due to overall weakness in cement prices during the quarter and some increase in share of bulk cement
EBITDA/ton improved by 5.7% YoY to Rs 1007/ton, but like-to-like comparison shows an improvement of ~11% YoY considering the considerable improvement in profitability of India Cements
Overall management’s commentary was positive on demand and pricing fronts. They have stated that demand has improved substantially from Dec 2025 onwards (double digit growth), led by increase in construction activities. Also, they have taken price hike of Rs 8-10 per bag in January 2026 across all the regions
Management maintains its guidance of better-than-industry growth with further improvement in operational efficiencies (~Rs 100/ton cost reduction annually over the next 3 years)
On capacity expansion front, company is in process of expanding its capacity by ~40 mtpa organically to reach 235 mtpa by FY28E (from ~194 mtpa consolidated capacity at present), which gives strong growth visibility for longer term
Over FY25-28E, we estimate company’s revenue CAGR of ~14% led by ~12% volume CAGR. At EBITDA level, we expect EBITDA CAGR of ~29% CAGR as we estimate EBITDA/ton to improve to ~Rs 1426/ton by FY28E (from Rs 924/ton in FY25)
We have maintained Buy on UltraTech Cement with a target price of Rs 15,000

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