Detailed Narrative
Q2 FY26 Performance & Integration
India Cements, now a subsidiary of UltraTech Cement Limited, reported a 6% volume growth in Q2 FY26. The company's EBITDA per metric ton for the quarter stood at INR 386. The brand transition to UltraTech is actively progressing, with 31% conversion completed by the end of the quarter, and management anticipates this will exceed 40% by the December quarter. This integration effort is crucial for realizing synergy benefits and improving market positioning.
Strategic Capex & Future Outlook
India Cements has initiated a substantial capex program amounting to INR 1,592 crores. This investment is strategically allocated for debottlenecking existing operations, installing 21 megawatts of Waste Heat Recovery Systems (WHRS), 192 megawatts of renewable energy, and other efficiency enhancements. Furthermore, 2.4 million tons of capacity expansion is planned at the Chennai and Rajasthan plants, with this specific expansion costing INR 422 crores and expected to yield an Internal Rate of Return (IRR) of over 20%. Upon the full operationalization of these expansions, India Cements assets are projected to achieve an EBITDA of INR 1,000 per ton and a net debt to EBITDA ratio of approximately 0.5x.
Asset Optimization & Debt Reduction
In a move to optimize its asset portfolio and strengthen its financial position, India Cements has exited its coal assets located in Indonesia. This divestment is a post-balance sheet event, and the cash flows generated from the sale of these assets are earmarked to help reduce India Cements' debt. This action underscores a commitment to improving the company's balance sheet and operational efficiency post-acquisition.