The India Cements Limited

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.

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.

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.

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.

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.

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.