Detailed Narrative
Phase 4 Expansion: 22.8 MTPA at Industry-Leading Capital Efficiency
UltraTech announced Phase 4 expansion of 22.8 MTPA — 18 MT in North and 4.8 MT in West — at less than ₹500 crores per MT, well below industry average. This includes 15.68 MT of clinker capacity (two 10,000 TPD lines plus debottlenecking). The expansion takes total capacity to 240-245 MT by FY29, with further 20-25 MT potential beyond that. Capex will be ~₹10,000 crores per year for FY27-28, funded largely by internal accruals.
UltraTech Brand Growth at 13.2% — Premiumization Accelerating
UltraTech as a brand grew 13.2% YoY, driven by rapid conversion of India Cements (31%) and Kesoram (55%) output. Premium cement share and rural market growth both at 13%. GST 2 reduction of ~₹30/bag creates premiumization tailwind. UBS stores sold 21% of total sales, and RMC has crossed 400 plants (4% of cement volumes).
India Cements: ₹2,014 Crores Capex Program for Turnaround
India Cements capex program totals ₹2,014 crores — ₹1,592 crores for efficiency (debottlenecking, 21 MW WHRS, 192 MW RE, efficiency improvements) and ₹422 crores for 2.4 MT brownfield expansion at Chennai and Rajasthan (>20% IRR). Indonesian coal assets divested to fund debt reduction. Brand transition at 31%, targeting 40%+ by December quarter. EBITDA/ton target of ₹1,000 by FY28 with net debt/EBITDA of ~0.5x.
One-Off Cost Impacts Mask Underlying Improvement
Q2 saw ~₹200/ton one-off📎 cost impact: maintenance shutdowns (617 kiln days, ₹100/ton), advertising (₹50 crores = ₹15/ton), staff increments (₹94 crores = ₹25/ton), and operating leverage from lower QoQ volumes (₹70/ton). Maintenance is expected to normalize by ₹100/ton in Q3. Fuel cost at ₹1.8/kcal with coal:petcoke mix at 48:44.
GST 2 Creates Dual Benefit — Consumer Affordability and Coal Cess Reduction
GST rate reduction benefits consumers by ~₹30/bag, potentially driving premiumization. More importantly, the Clean Energy Cess on coal is being removed, which disproportionately benefits UltraTech due to its higher coal consumption in the fuel mix. CFO confirmed no fuel cost inflation expected despite pet coke price movements.