UltraTech Cement remains on a concrete growth path amid strong Q4 show

Strong Q4 performance, rising margins and aggressive capacity expansion plans position UltraTech Cement to sustain growth, aided by robust demand outlook and cost discipline

UltraTech Cement reported both volume growth and higher profitability in the January–March quarter (Q4) of FY26, with 9 per cent consolidated volume growth and market share gains. Unit EBITDA rose 11 per cent to a multi-year high of  ₹1,253 per metric tonne (MT) with a price rebound. The company added 8 million MT of capacity in FY26 and plans capacity expansion of another 37 million MT over the next two years, with an annual capex rate of about ₹10,000 crore.

 

The company delivered healthy volume growth of 9 per cent year-on-year (Y-o-Y) and 15 per cent quarter-on-quarter (Q-o-Q). Management pointed to a bullish demand outlook and guided for double-digit volume growth outpacing the industry, assuming policy support for infrastructure spending continues.

 

UltraTech’s consolidated EBITDA increased 21 per cent Y-o-Y to ₹5,600 crore. Operating profit margin (OPM) surged 170 basis points (bps) Y-o-Y to 22 per cent. Adjusted profit after tax (PAT) grew 20 per cent Y-o-Y to ₹ 2,990 crore. Profitability improved sharply, with better realisations, operating leverage from higher volumes, and lower costs. Blended and grey cement realisations improved 2 per cent Q-o-Q, aided by a better trade mix (65.6 per cent vs 64.3 per cent Q-o-Q). Completion of brand transition also improved realisations from India Cements and Kesoram.

 

Realisation was up 3 per cent Y-o-Y to ₹ 5,770 per MT. Consolidated revenue was up 12 per cent at ₹ 25,800 crore. Sales volume grew 9 per cent Y-o-Y to 44.7 million MT, with ready-mix concrete (RMC) revenue up 24 per cent and white cement revenue up 15 per cent Y-o-Y. Operating expenses per MT remained flat Y-o-Y.

 

In FY26, revenue was up 17 per cent Y-o-Y at ₹ 88,510 crore, EBITDA was up 36 per cent to ₹ 17,020 crore and adjusted PAT was up 35 per cent to ₹ 8,270 crore. EBITDA per MT grew 18 per cent Y-o-Y to ₹ 1,103, averaged over four quarters. OPM rose 270 bps Y-o-Y to 19 per cent. In FY26, operating cash flow (OCF) stood at ₹ 15,320 crore vs ₹ 10,670 crore in FY25. Capex stood at ₹9,680 crore vs ₹ 9,130 crore in FY25, while free cash flow (FCF) stood at ₹ 5,640 crore (₹1,540 crore in FY25). Lead distance stood at 367 km in Q4, down 18 km Y-o-Y. The green power mix stood at 43 per cent in Q4FY26 vs 35.7 per cent a year ago. The green power mix will rise to 85 per cent by FY30.

 

UltraTech is protected against adverse macro conditions, due to its diversified packaging supplier base, fuel mix flexibility and branding that helps sustain recent price hikes (₹ 6–12 per bag in Apr’26). The capacity ramp-up, good cash flows, strong balance sheet and tight cost discipline will help it maintain leadership.

 

The 9 per cent Y-o-Y volume growth in Q4FY26 beat industry growth of 6–7 per cent. The planned capacity ramp will help it sustain similar volume gains through the medium term. Higher packaging costs of ₹ 20 per MT (₹ 90 crore in Q4FY26) and an adverse forex impact of ₹30 per MT at the EBITDA level impacted profit. Packaging cost pressure has partially eased, while fuel and pet coke inflation may increase. Q1FY27 fuel costs may be held at current levels due to inventory.

 

Management hopes to offset this through higher domestic coal sourcing and greater sourcing via long-term contracts. UltraTech has cut costs by ₹185 per MT of organic cost savings from the FY25-end and expects ₹115 per MT more savings with a higher green power mix (85 per cent by FY30 vs 43 per cent now), better common concrete ratio and lower lead distance. India Cements ramp-up will raise profitability, with EBITDA at ₹1,000 per MT by Q3FY28 from ₹670 per MT in Q4FY26.

 

Despite capex plans, UltraTech announced a dividend of ₹240 per share, a yield of 2 per cent at the current market price. This indicates confidence in cash flow generation, maintaining the net debt/EBITDA ratio at 1x. The cement major reported return on capital employed (RoCE) of 15 per cent and is targeting RoCE of 20 per cent by FY30.

 

The integration of India Cements and Kesoram has been completed ahead of schedule, with full brand migration done by Mar’26. Capex is pegged at ₹8,000–10,000 crore annually for capacity expansion over the next four years. The balance sheet has sustained a consolidated debt-to-EBITDA ratio below 1.0x.

 

Assuming cost headwinds due to West Asia can be managed, medium-term trends seem strong. Most analysts are positive on the stock, with valuations of between 17–19 times the expected enterprise/EBITDA for FY27.

 

According to Bloomberg, 34 of the 37 analysts polled post Q4 results are bullish on the stock, while two are bearish and one is neutral. Their average one-year target price is ₹13,769, indicating potential upside of 16 per cent. The stock slipped about 1.5 per cent post results.