The India Cements Limited — Q1 FY27 earnings call

Call held 20 Jul 2026

Management summary

The India Cements Limited, a subsidiary of UltraTech Cement Limited, demonstrated a strong turnaround in Q1 FY27 with significant revenue and volume growth, alongside improved EBITDA per ton. The brand migration to UltraTech is complete, and a substantial capex program is underway to further enhance efficiency and green power. While the parent company anticipates cost escalations in Q2 FY27, the long-term outlook for India Cements' profitability remains positive.

Highlights

  • India Cements' Q1 FY27 revenue (ex-factory sales) grew 21% to INR 993 crores, compared to INR 821 crores like-for-like in Q1 FY26.

  • India Cements' Q1 FY27 volumes saw a 19% growth.

  • EBITDA per ton for India Cements climbed to INR 603 in Q1 FY27, up from INR 509 in Q4 FY26.

  • The brand migration of India Cements to UltraTech is 100% complete, converting customers to a premium brand.

Concerns

  • UltraTech (parent company) anticipates a cost increase of INR 130-140 per ton in Q2 FY27 due to fuel, maintenance, and operating deleverage.

  • Seasonal monsoon slowdown and potential dry spells in some regions (e.g., Rajasthan) could negatively impact demand.

Key financials

  1. Revenue (ex-factory sales) ₹993 Cr +21%YoY
  2. Volume Growth 19% +19%YoY
  3. EBITDA per ton ₹603 +18.5%QoQ

What they filed

Q1 FY27: revenue down 0.6%, net profit up 120.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,022 940 1,198 1,025 1,117 +9%1,114 +19%1,229 +3%1,019 −1%
EBITDA-163 -190 -2 83 81 +150%79 +142%153 +7750%156 +88%
Net profit-339 119 18 -133 9 +103%-3 −103%60 +233%27 +120%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed internal accruals
    • Cost improvement capex for waste heat recovery, preheater upgradation, cooler upgradation, and green power for India Cements ₹2,000 Cr
    Cost improvement capex of about INR2,000 crores is being deployed into waste heat recovery, preheater upgradation, cooler upgradation, etcetera, and a step change in the green power trajectory from around 3% of their power requirements to about 86% of their power requirements by the end of fiscal '28.
  • Debt 0.9× EBITDA
    We had started the year with a net debt EBITDA of 0.94 and the quarter, we have ended with 0.87x net debt to EBITDA. Our belief is, and we are confident that this year also, we'll end the net debt to EBITDA below 1x.
  • M&A The India Cements Limited Acquisition · Integrated · Consideration ₹[object Object] (undisclosed)

    Turnaround of sound assets in strong markets, previously held back by underinvestment and subscale operating discipline.

    India Cements' EBITDA per ton climbed from INR 386 in Q2 FY26 to INR 603 in Q1 FY27. Brand migration to UltraTech is 100% complete.

    When we acquired ICL, we told you it was a turnaround waiting to be unlocked. Sound assets in strong markets, held back only by years of underinvestment and subscale operating discipline. One year in, that turnaround is no longer a promise on the slide. It is a trajectory you can read in the numbers. The improvement has been sequential and unbroken. India Cements' EBITDA per ton has climbed from roughly INR386 per ton in Q2FY26 to INR400 to INR509 and INR603 this quarter. Gain, which is quarter after quarter exactly as we said it would be. And every lever behind that number is one we own. Brand migration to UltraTech is 100% complete.

Guidance & targets

Profitability

  • India Cements EBITDA per ton Profitability · Q4 FY28 · High confidence INR 1,000
    EBITDA of INR1,000 per ton for India Cements remains very much in sight with the full benefit of the capex program flowing through the P&L from Q4 fiscal '28.

    — Atul Daga, Chief Financial Officer

Green Initiatives

  • India Cements Green Power Share Green Initiatives · end of FY28 · High confidence 86%

    From 3% today

    step change in the green power trajectory from around 3% of their power requirements to about 86% of their power requirements by the end of fiscal '28.

    — Atul Daga, Chief Financial Officer

Debt

  • Net Debt to EBITDA Debt · FY27 · High confidence below 1x
    Our belief is, and we are confident that this year also, we'll end the net debt to EBITDA below 1x.

    — Atul Daga, Chief Financial Officer

New Business

  • Cables and Wires Project Launch New Business · Q3 FY27 · High confidence Q3 FY27
    We said cables and wires would launch in Q3 fiscal '27, and it will.

    — Atul Daga, Chief Financial Officer

Cost

  • Cost Increase per ton Cost · Q2 FY27 · Medium confidence INR 130-140
    I would expect the cost to go up by INR130 to INR140 per ton, all put together.

    — Atul Daga, Chief Financial Officer

Market context

  • Domestic Grey Cement Volume Growth Volume · FY27 · High confidence double-digit
    Yes, we are targeting double-digit volume growth this year.

    — Atul Daga, Chief Financial Officer

What to watch in Q2 FY27

India Cements EBITDA per ton progress

next quarter
Current INR 603 (Q1 FY27)
Target Progress towards INR 1,000

Why it matters

Tracking the turnaround and profitability improvement of the subsidiary.

EBITDA of INR1,000 per ton for India Cements remains very much in sight with the full benefit of the capex program flowing through the P&L from Q4 fiscal '28.

Risks & concerns

  • Fuel Cost Volatility

    high

    West Asia conflict led to sharp increases in crude and coal costs, impacting Q1 and expected to cause INR 130-140/ton increase in Q2 FY27.

    Management acknowledged

  • Cost Escalations

    high

    Overall cost increases of INR 130-140 per ton expected in Q2 FY27 due to fuel, maintenance, and operating deleverage.

    Management acknowledged

  • Monsoon Seasonality & Dry Spells

    medium

    Seasonal demand slowdown during monsoons, with potential negative impact from dry spells in regions like Rajasthan.

    Management acknowledged

Q&A highlights

7 direct
India Cements Integration & Stand-alone Entity Partial
There is a capex program underway, which we mentioned has to get completed. There are some non-core assets in terms of land, which we need to dispose of. So Q4 '28 or maybe a quarter earlier, we expect to complete our journey.

Analyst sought clarity on the timeline for full integration or merger of India Cements, indicating ongoing work and a target completion by Q4 FY28.

Asked by Amit Murarka

Cost Inflation in Q2 FY27 Direct
I would expect the cost to go up by INR130 to INR140 per ton, all put together.

Management provided specific guidance on the expected cost increase per ton for the upcoming quarter, crucial for margin projections.

Asked by Rahul Gupta

Raw Material Cost Spike (Industrial Diesel) Direct
industrial diesel went up almost 50% from INR100 per liter to INR157. From INR78, INR80, my colleagues correct me from INR78, INR80 pre-war, it went up to INR150s during the war period.

Clarified the specific driver behind the reported spike in limestone raising costs, linking it to industrial diesel price increases.

Asked by Siddharth Mehrotra

Cement as Branded Product vs. Commodity Direct
As long as India is an individual homebuilder market, it's a retail market, and that's where the retail markets bring the requirement of brand. Very unique market in India, not just cement, steel is also branded.

Management articulated the strategic importance of brand power in the Indian cement market, emphasizing its retail-driven nature and the value of trust for individual homebuilders.

Asked by Raghav Maheshwari

UltraTech's Market Share Gains Direct
I think the fundamentals of our brand are very strong. Our distribution network, our reach to the markets, our people, our quality, the brand which people trust... we have converted that market for a customer who was happy buying B and C category at a at a particular price point, now has got convinced to buy UltraTech at a higher price.

Management explained the drivers behind UltraTech's market share gains, highlighting brand strength, distribution, and successful premiumization of acquired customer bases.

Asked by Pinakin

Future Capacity Growth beyond 240 MT Direct
So inorganic, obviously, if there are opportunities, we will examine them. And our team has already got on to the drawing board to take us beyond 240. Once the plans are ready, we will come back with absolute micro details.

Management indicated proactive planning for capacity expansion beyond current targets, including potential inorganic growth, signaling long-term growth ambitions.

Asked by Raashi

River Linking Projects (Cement Intensity) Direct
Well, I don't have a comparison with hydropower plants, but river banks have to be done. Silting has to be done. And I don't know whether dams are required or not required, but river banks have to be built, which is concrete. And with the river banks being built, you have concrete structures on the either sides as well.

Management confirmed the high cement intensity of river linking projects, identifying them as significant future demand drivers for the industry.

Asked by Pulkit Patni

Dividend Policy Direct
Percentage of profits, that's the way our Board is looking at it... I'm expecting good dividends.

Management clarified the Board's approach to dividends, linking it to a percentage of profits and expressing confidence in future payouts.

Asked by Ashish Jain

3 min read 6 chapters

Detailed narrative

India Cements Turnaround & Integration Progress

The India Cements Limited, a subsidiary of UltraTech Cement Limited, reported a significant turnaround in Q1 FY27. Revenues from ex-factory sales grew 21% to INR 993 crores, with volumes increasing by 19%. EBITDA per ton improved substantially to INR 603, up 18.5% sequentially from INR 509 in Q4 FY26. The brand migration of India Cements to UltraTech is now 100% complete, successfully converting customers to a premium brand. Management aims for India Cements to achieve an EBITDA of INR 1,000 per ton by Q4 FY28, supported by a INR 2,000 crore capex program focused on waste heat recovery, preheater/cooler upgradation, and green power initiatives.

Q1 FY27 Performance Overview (UltraTech & India Cements)

UltraTech Cement Limited, the parent company, commenced fiscal '27 with strong performance, achieving its highest-ever first-quarter results across volumes, revenues, EBITDA, and profit. Domestic volumes grew 13.1%, with capacity utilization at 81% on an enlarged 200 million-ton base. UltraTech's EBITDA stood at INR 5,146 crores, and PAT at INR 2,604 crores, marking a 17.2% YoY increase. The successful integration and brand conversion of acquired assets, including India Cements, contributed to a 21.3% growth in the UltraTech brand over the prior year.

Demand Outlook & Macro Trends

Management expressed confidence in robust demand, driven by infrastructure, housing, and urban real estate. Key projects like Maharashtra's INR 20,000 crore shipbuilding cluster, Odisha's INR 50,000 crore deep seaport, and Tamil Nadu's INR 18,000 crore data centers and shipbuilding projects are expected to fuel cement demand. Urban real estate, particularly in Mumbai and top 8 cities, showed strong property registrations and unit sales growth in Q1 FY27. The urbanization trend in India, currently at 35%, is projected to reach 39% by 2030, indicating sustained long-term demand.

Cost Environment & Mitigation Strategies

The quarter saw significant cost pressures, particularly from fuel. Industrial diesel prices surged from INR 100 to INR 157 per liter, impacting limestone raising costs. Blended coal cost was USD 134 per ton, and packing bag costs increased from INR 9 to INR 12 per bag. UltraTech anticipates a further cost increase of INR 130-140 per ton in Q2 FY27 due to fuel, maintenance, and operating deleverage. However, the company leverages structural buffers like 1,897 MW of green power (meeting 47% of total requirements) and optimized logistics (lead distance reduced to 360 km) to absorb these shocks.

Capacity Expansion & Green Initiatives

UltraTech completed FY26 with INR 9,500 crores in capex, commissioning 12 million tons of new capacity in Q1 FY27, bringing its total capacity to 205.5 million tons. An additional INR 17,000 crores capex program is underway for the next 2-2.5 years, targeting a total capacity of 242 million tons, with grey cement capacity reaching 212.7 million tons by end of FY27. For India Cements, a INR 2,000 crore capex is dedicated to cost improvement and green power, aiming to increase its green power share from 3% to 86% by end of FY28.

Cables & Wires New Business Update

UltraTech's new Cables and Wires business, an investment of INR 1,800 crores with INR 888 crores already spent or committed, is on schedule. Trial runs have commenced, and regulatory approvals are in place. The company reaffirms its commitment to commissioning and launching products in Q3 FY27 (October-December 2026 quarter). Management expressed high aspirations for this new venture, stating 'Sky is the limit' for its growth potential.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Construction Materials earnings calls