The India Cements Limited — Q3 FY26 earnings call

Call held 24 Jan 2026

Management summary

UltraTech Cement reported strong Q3 FY26 results, driven by robust demand across all regions, particularly from infrastructure projects. The company is on track with its ambitious capacity expansion plans, aiming for over 90% utilization in Q4, and continues to focus on cost efficiencies. Integration of recent acquisitions (Kesoram, India Cements) is progressing well, contributing to improved financial metrics and a healthy net debt to EBITDA ratio.

Highlights

  • Consolidated net debt to EBITDA at 1.08x, with a target of 0.8-0.9x by fiscal year-end.

  • Estimated Q3 industry demand growth of 9-10% driven by robust infrastructure development.

  • Clinker conversion factor improved to 1.49, indicating enhanced operational efficiency.

  • Cost improvement program delivered INR86 per ton last year, with an expectation to exceed INR100 per ton this financial year.

  • Capacity utilization projected to be over 90% in the January-March quarter, reflecting strong demand absorption.

Concerns

  • Southern India pricing has not yet achieved desired stability despite acquisitions, though demand is opening up.

  • Potential impact on the cement industry from rising fuel costs (pet coke, coal), rupee depreciation, and the new labor code.

  • An ongoing ED case related to India Cements, with attached assets, requires legal opinion to assess implications.

Key financials

  1. Net Debt to EBITDA 1.08×
  2. India Cements EBITDA/ton ₹400/ton
  3. Kesoram EBITDA/ton ₹600/ton
  4. Clinker Conversion Factor 1.49
  5. Lead Distance 363 km
  6. Fuel Cost ₹1.8/kcal
  7. Premium Share 36%

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 ₹9,500 Cr entirely through internal accruals, maintaining a prudent balance sheet and a healthy leverage profile
    • India Cements cost improvement ₹144 Cr
    • Kesoram cost improvement ₹263 Cr
    • Cables and wires project ₹197 Cr
    Importantly, we are funding all our growth through internal accruals, maintaining a prudent balance sheet and a healthy leverage profile.
  • Debt 1.1× EBITDA
    On a consolidated basis, we are at 1.08x net debt EBITDA.
  • M&A Kesoram Acquisition · Integrated

    Brand transition and cost improvement

    EBITDA per ton around INR600 in Q3 (was INR755 in Q2).

    Integration of recent acquisitions is progressing very well with rapid brand transition. Kesoram and India Cements are ahead of the initial plans, with brand conversion at Kesoram having reached 69% in December '25. And today, if we speak, it must have crossed further. At Kesoram, we have already spent INR263 crores, out of the commitment of about INR382 crores. And just on Kesoram in the second quarter, you had indicated the EBITDA per ton was INR755, what is that number in this quarter? Would be around INR600 this quarter.
  • M&A India Cements Acquisition · Integrated

    Brand transition, cost improvement, non-core asset monetization

    EBITDA per ton around INR400 in Q3. Non-core asset sales expected to generate minimum INR500 crores.

    India Cements has already crossed 58% at the end of December '25. At India Cements, we have committed already INR601 crores and spent INR144 crores on the program. Just also on India Cements, like in Q3, I see that the EBITDA per ton was about INR400. Noncore there are land parcels essentially. I would expect further generation of up to INR500 crores minimum, which we should be able to get.

Guidance & targets

Debt

  • Net Debt to EBITDA Debt · FY end · High confidence 0.8-0.9x
    I believe and I'm very confident that we'll reach the mark of 1x and be in 0.8, 0.9x net debt EBITDA by the end of this fiscal year.

    — Atul Daga

Profitability

  • India Cements EBITDA/ton Profitability · Q4 FY27 · High confidence INR1,000
    You had earlier guided for INR1,000 exit in Q4 '27.

    — Atul Daga

Cost

  • Cost Improvement Program Savings Cost · this financial year · High confidence cross INR100 mark

    From INR86 per ton today

    My guess is we should be crossing INR100 mark on those efficiency improvement programs in this financial year.

    — Atul Daga

Efficiency

  • Clinker Conversion Factor Efficiency · High confidence 1.54
    we have taken a target of clinker conversion factor of 1.54. We are moving on that direction. In 1.54, we have reached INR1.49.

    — Atul Daga

Sustainability

  • Renewal Energy Share Sustainability · going forward · Medium confidence 60%

    From 41% today

    our renewal energy has gone to almost 41% kind of thing, and it is further likely to go to 60% going forward actually.

    — K.C. Jhanwar

  • Green Share Sustainability · FY27 or 1H FY28 · Medium confidence 60%

    From 42% today

    And the green share from currently 42% to 60% by FY27, we will be reaching? Yes. So '27 or first half of '28, so just giving us a flexibility of some delays.

    — Atul Daga

Capacity

  • Capacity Additions Capacity · Q4 FY26 · High confidence 8-9 million tons
    So, we should have approximately 8 to 9 million tons more coming in this quarter.

    — Atul Daga

  • Capacity Additions Capacity · FY27 · High confidence 12 million tons
    And the balance, 12 million tons in fiscal '27 and then balance remaining will be in '28.

    — Atul Daga

  • Capacity Additions Capacity · 1H FY27 · Medium confidence 4-5 million tons
    4 million to 5 million tons, but it all depends, as you know, Shravan, because there are multiple moving parts. So sometimes things get delayed and kind of thing. But yes, I can guess maybe 4 to 5 million tons.

    — K.C. Jhanwar

Capex

  • Total FY Capex Capex · FY26 · High confidence INR9,500-10,000 crores
    INR7,000 crores to INR7,200 crores is 9 months and yes INR2,000 crores to INR2,500 crores will get spent in this quarter. So anywhere around INR9,500 crores, INR10,000 crores.

    — Atul Daga

Demand

  • Demand Growth Demand · next 4-5 years · High confidence 7-8%
    And for next 4, 5 years, normally what we guided in corporate 7% to 8%. So that number remains intact. That remains. That remains, Shravan.

    — Atul Daga

  • Q4 FY26 Demand Growth Demand · Q4 FY26 · Low confidence 9-10%
    No, I don't think. 9%, 10% may be a little optimistic, but difficult to say because the last year base itself was, all we know is the good base. But yes, all I think it is going to be the robust demand actually.

    — K.C. Jhanwar

What to watch in Q4 FY26

Net Debt to EBITDA Ratio

By end of FY26
Current 1.08x (consolidated)
Target 0.8-0.9x

Why it matters

Key indicator of financial health and progress towards deleveraging targets.

On a consolidated basis, we are at 1.08x net debt EBITDA. I believe and I'm very confident that we'll reach the mark of 1x and be in 0.8, 0.9x net debt EBITDA by the end of this fiscal year.

Risks & concerns

  • Fuel cost volatility (pet coke, coal), rupee depreciation, and new labor code impact.

    medium

    Cost increases from pet coke, coal, rupee depreciation, and the new labor code will impact the cement industry, but management expects to pass on these escalations into prices.

    Management acknowledged

  • Legal implications of an ED case with attached assets for India Cements.

    medium

    An Enforcement Directorate (ED) case has resulted in the attachment of India Cements' assets, and the company is seeking legal opinion to understand the implications before making further decisions.

    Management seeking legal opinion

  • Cyclical nature of the industry causing quarter-to-quarter fluctuations.

    low

    While quarter-to-quarter results may fluctuate due to industry cyclicality, management is confident in the overall annual performance.

    Management acknowledged

Q&A highlights

5 direct
Industry capacity addition and its impact on pricing. Direct
The reason I talked about all the demand footprint and demand new initiatives, I think cement will easily get absorbed. And if the demand remains strong, we will not see any problem in prices.

Management asserts that strong demand, especially from infrastructure, will absorb new capacity, mitigating concerns about pricing pressure.

Asked by Amit Murarka

Drivers for India Cements' EBITDA/ton improvement to INR1,000 by Q4 FY27. Partial
So, what will happen is the brand conversion, which has already taken place... Balance almost 40% or 45% of brand conversion has to be completed and prices are going up in the southern markets as well. Further, as I called out, the capex program has begun for efficiency improvement.

Explains the multi-pronged strategy (brand conversion, regional pricing, efficiency capex) to significantly improve profitability of the acquired India Cements assets.

Asked by Amit Murarka

Phased capacity addition guidance for Q4 FY26, FY27, and FY28. Direct
So, we should have approximately 8 to 9 million tons more coming in this quarter. And the balance, 12 million tons in fiscal '27 and then balance remaining will be in '28.

Provides specific, phased capacity expansion numbers, crucial for understanding UltraTech's future volume growth potential and market share strategy.

Asked by Pulkit

Rural demand recovery and outlook. Direct
Rural demand, simple way to look at rural demand is look at our trade ratios. If our trade ratios remain strong, rural demand is equally buoyant. We are not witnessing any depression in rural demand. Q4 also will be solid is what my expectation is.

Clarifies that rural demand remains strong and is expected to be solid in Q4, addressing potential concerns about a slowdown in this key segment.

Asked by Jashandeep Chadha

Southern India pricing stability and future outlook. Partial
More demand. I think demand is opening up, and I stand by my statement South will be new north... So, I'm not talking about 1 quarter, Pinakin, but as we as strategic players are looking at a long-term stability and reliability of the sector.

Addresses the historical volatility of Southern India pricing, with management expressing optimism for long-term stability driven by institutional demand and strategic focus.

Asked by Pinakin Parekh

Progress on India Cements non-core asset sales and thoughts on merger/structure simplification. Partial
Noncore there are land parcels essentially. I would expect further generation of up to INR500 crores minimum, which we should be able to get... There's a property in Hyderabad and some financial securities, which are attached. We are seeking legal opinion what will be the implications of that case, and then only we'll take a decision further.

Details the progress and challenges in monetizing non-core assets of India Cements, which is key for debt reduction and unlocking value, while also highlighting legal complexities.

Asked by Ritesh Shah

Contribution of operating leverage to EBITDA increase and its future trajectory. Direct
So operating leverage, obviously, will keep on playing a positive impact on efficiency improvement. Prices were a dampener on the profitability, but volumes, which gave me operating leverage and cost management, very efficient and tight cost management.

Explains that EBITDA growth is primarily driven by volume and efficient cost management, confirming that operating leverage will continue to positively impact profitability.

Asked by Andrey Purushottam

Outlook for Q4 FY26 EBITDA per ton. Direct
To your second question, we will do much better than what we did this quarter. I don't want to get into any specific number.

Management indicates a strong Q4 performance with expected improvement in profitability, signaling continued positive momentum without providing a specific numerical target.

Asked by Girija Ray

2 min read 6 chapters

Detailed narrative

Robust Demand & Infrastructure-Led Growth

Management highlighted a strong demand environment driven by government focus on infrastructure. Punjab is investing INR16,000 crores in road development, Delhi Metro INR12,000 crores, and Uttar Pradesh is developing 1,575 km of metro network. Maharashtra sees significant projects like the Uttan-Virar Sea Link (INR58,000 crores) and Mumbai Metro expansions, translating into solid demand for cement. The Q3 industry demand growth is estimated at 9-10%.

Pan-India Infrastructure Development

The East and South also show strong growth. West Bengal plans INR8,487 crores in road initiatives, and Bangalore's metro network is expanding from 96 km to 175 km by Dec '27. New Mangalore Port plans capacity expansion to 100 million tons by 2047. This widespread development translates into sustained demand for cement, with roads requiring 350-900 metric tons per kilometer and metros 11,000-19,000 metric tons per kilometer.

Capacity Expansion & Utilization

UltraTech is aggressively expanding capacity, with approximately 8-9 million tons expected in Q4 FY26, 12 million tons in FY27, and the remainder in FY28. The company expects to operate at over 90% of its installed capacity in the January-March quarter, indicating strong demand absorption. Two new clinker lines, one of 10,000 TPD and another 3.5 million tons per year, have been added.

Cost Efficiency & Profitability Initiatives

The company's cost improvement program is yielding results, with the clinker conversion factor improving to 1.49 and lead distance dropping to 363 kilometers. Management expects to cross INR100 per ton in cost savings this financial year, building on INR86 per ton achieved last year. Fuel costs remained stable at INR1.8 per kcal in Q3, and the premium share stands at 36%.

Capital Allocation & Debt Management

UltraTech's consolidated net debt to EBITDA ratio stands at 1.08x, with a target to reach 0.8-0.9x by the fiscal year-end. The company is funding its growth through internal accruals. Capex for 9 months was INR7,000-7,200 crores, with an additional INR2,000-2,500 crores planned for Q4, bringing the total FY capex to INR9,500-10,000 crores.

Acquisition Integration & Value Unlock

Integration of Kesoram and India Cements is progressing well, with brand conversion reaching 69% and 58% respectively by December '25. Cost improvement capex programs for these assets have begun, with INR263 crores spent at Kesoram (out of INR382 crores committed) and INR144 crores at India Cements (out of INR601 crores committed). Non-core asset sales from India Cements are expected to generate a minimum of INR500 crores, with INR200-250 crores already realized.

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