India's leading cement manufacturer, UltraTech Cement Ltd, has delivered impressive financial results for the December quarter, surpassing market expectations with robust performance driven by strong cement sales and strategic expansions.
Financial Performance Exceeds Expectations
The consolidated net profit of the Aditya Birla Group's cement subsidiary surged by an impressive 27% year-on-year to reach ₹1,725.40 crore, according to official exchange filings. This performance notably exceeded the Bloomberg consensus estimate of ₹1,526 crore, which was based on a comprehensive poll of 21 financial analysts.
Revenue from operations demonstrated substantial growth, increasing by 23% to ₹21,829.68 crore during the quarter, compared to ₹17,778.83 crore in the same period last year. This revenue expansion was supported by higher sales volumes and valuable contributions from recently acquired businesses.
Operational Strength and Capacity Utilization
The company's consolidated sales volumes reached 38.87 million tonnes per annum, representing a significant 15% increase from the third quarter of the previous fiscal year. UltraTech's management has indicated that for the current quarter, they anticipate operating at more than 90% of their installed capacity, a substantial improvement from the 77% utilization rate recorded in Q3FY26.
Infrastructure Boom Driving Sustained Demand
During post-earnings discussions with analysts, company executives emphasized that demand remains exceptionally strong, fueled by the government's ambitious infrastructure initiatives that are creating a robust, multi-year project pipeline across various regions. This development is supporting sustained cement consumption throughout the country.
Atul Daga, Chief Financial Officer at UltraTech, elaborated on this trend during the earnings call, stating, "India is witnessing a multi-year infrastructure build-out across roads, metros, railways, ports, and housing. New avenues such as data centres, renewable energy, and urban infrastructure are driving incremental demand."
The company is strategically positioned to capture this growing demand through its extensive pan-India network, ongoing capacity expansion projects, and continuous improvements in operating efficiencies, all while maintaining a prudent balance sheet and funding growth through internal accruals.
Pricing Dynamics and Cost Pressures
Cement prices experienced some softening during September, October, and November following GST changes. However, Daga noted that with increasing demand, the industry is witnessing price increases across all segments nationwide.
The CFO highlighted several cost pressures affecting the industry, including rising expenses for pet coke and coal, the implementation of new labour codes, and rupee depreciation. "All these factors will have an impact on the cement industry, and obviously, there is reason to pass on these cost escalations into prices," Daga explained.
Capacity Expansion and Future Outlook
UltraTech currently maintains a domestic grey cement capacity of 188.66 million tonnes per annum. Including its 5.4 million tonnes per annum capacity in the United Arab Emirates, the company's consolidated capacity stands at 194.06 million tonnes per annum.
The company has ambitious expansion plans, targeting a total global cement capacity of 240.76 million tonnes per annum by FY28. Daga outlined the upcoming additions, stating, "We should have approximately 8 million tonnes to 9 million tonnes more coming in this quarter, and the balance, I think 16-12 million tonnes in fiscal '27, and then remaining will be in '28."
Financial Metrics and Exceptional Items
Earnings before interest, tax, depreciation, and amortization for the quarter reached ₹4,051 crore, compared to ₹3,142 crore in Q3FY26. However, the company continued to face pressure from higher power and fuel costs as well as increased freight expenses during the quarter.
UltraTech recognized a one-time exceptional charge of ₹88.48 crore related to the implementation of new labour codes. This charge primarily reflects additional provisions for gratuity and compensated absences following changes in the definition of wages under the updated regulations.
