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    UltraTech Cem.

    ULTRACEMCOGood
    Construction Materials·21 Jul 2025
    Management Summary

    UltraTech delivered a strong Q1 FY26 with consolidated growth of 9.7% YoY. The UltraTech brand grew 6.5%, with South and East seeing the highest pricing gains. India Cements is on track for turnaround with brand transition underway and EBITDA at ₹400/ton. Management raised clinker conversion to 1.49x and guided for next phase of growth announcement before calendar year end.

    Highlights

    8
    • Consolidated volume growth of 9.7% YoY including Kesoram in both periods

    • UltraTech brand volume growth of 6.5% YoY

    • Realization up 2.2% QoQ for UltraTech brand

    • India Cements operating EBITDA of ₹400/ton (₹458/ton adjusted for tolling margin)

    • India Cements impacted by new Tamil Nadu limestone royalty of ₹160/ton

    • Clinker conversion factor improved to 1.49x from 1.44x in prior quarter

    • Lead distance reduced to 370 km from 384 km QoQ

    • ₹10,000 crores capex planned for FY26; cables & wires on track with possible savings

    What Changed1

    vs Q1 FY26

    Guidance items11 → 7 (-4)

    Key financials

    Single quarter

    06 metrics
    1. 01Volume Growth9.7%
    2. 02UltraTech Brand Growth6.5%
    3. 03ICL EBITDA/Ton₹400
    4. 04Clinker Conversion1.49 x
    5. 05Lead Distance370 km

    Guidance & targets

    7
    CategoryTargetPriority
    Volume
    Volume Growth FY26
    Double-digit on FY25 base
    High
    Capex
    Capex FY26
    ₹10,000 crores
    High
    Capex
    Cables & Wires Capex
    ≤₹1,800 crores (possible savings)
    High
    Margin
    India Cements EBITDA/Ton Target
    >₹1,000/ton
    High
    Margin
    India Cements Brand Transition
    100% complete
    High
    Capacity
    Next Phase Growth Announcement
    Before end of calendar year or FY26
    High
    Cost
    Power & Fuel Costs
    Range-bound, no increase expected
    Medium

    Risks & concerns

    6
    RiskSeverity

    Tamil Nadu limestone royalty of ₹160/ton impacting India Cements

    New royalty directly impacts India Cements which has significant Tamil Nadu operations. This is a structural cost increase.Management acknowledged

    medium

    Difficulty splitting organic vs inorganic volume growth creates transparency concerns

    CFO reacted defensively to analyst's simple arithmetic showing 2% organic growth. Insisted on looking at UltraTech brand growth of 6.5% instead.Analyst deflected

    low

    Q4 FY25 industry growth was only 4.3% — not the 6.5-7% reported by other sources

    CFO proactively corrected the record, admitting his earlier estimate of 4% was slightly off at 4.3%, but strongly contested industry estimates of 6.5-7%.Management acknowledged

    low

    Areas of Evasion(3)

    • Organic vs inorganic volume split
    • Industry growth estimate for Q1
    • India EBITDA/ton blended number

    Q&A highlights

    3

    “Firstly, I don't like your aggressive tone. Secondly, the way to look at is UltraTech brand which has grown 6.5%.”

    Highlights difficulty in parsing organic vs inorganic volume growth — CFO became defensive when analyst did simple arithmetic showing only 2% organic growth

    asked by Navin Sahadeo, ICICI Securities

    2 min read5 chapters

    Detailed Narrative

    01

    India Cements Integration: Tolling Model and Cost Alignment Roadmap

    India Cements is being integrated via a tolling model — output rebranded as UltraTech and sold at UltraTech prices, with ₹200/ton marketing margin retained by UltraTech. Adjusted EBITDA for ICL is ₹458/ton. FY28 target is >₹1,000/ton. WHRS (21 MW), renewable energy (219 MW) and efficiency capex will take ICL from 3% to 86% green power by FY28, funded by debt and internal accruals targeting <₹50 crores net debt.

    02

    Clinker Conversion Reaches 1.49x — A Significant Efficiency Milestone

    Clinker conversion factor jumped to 1.49x from 1.44x last quarter — a significant improvement that CFO highlighted as under-appreciated by analysts. This implies higher blending and lower per-ton clinker consumption, directly benefiting both costs and sustainability metrics. Lead distance also dropped to 370 km, contributing ₹24/ton visible savings.

    03

    Next Phase of Growth Being Prepared — Phase 4 and 5 Already in Pipeline

    Management confirmed the blueprint for Phase 4 of organic growth is being stitched and will be presented to the Board before CY25 end. Phase 5 work has also started. Brownfield opportunities exist at India Cements locations. The company targets growing faster than 5-7% industry CAGR, with capacity set to cross 212 MTPA in the current phase. Cement demand runway extends 10-15 years with India at 295 kg per capita vs developed economy peak of 600-700 kg.

    04

    South India Pricing Stabilization Expected with Demand Catalysts

    South India is expected to benefit from multiple demand catalysts — Amravati capital development, new Andhra Pradesh government infrastructure push, Telangana green shoots, and Tamil Nadu election-driven spending. CFO quipped 'South could be a new North.' Both management and MD confirmed consolidation in South should prevent negative pricing pressure.

    05

    Cables & Wires Business Progressing On Schedule

    Major orders placed, key people onboarded, land leases being finalized in Gujarat. The project is on track for December 2026 launch with possible capex savings vs the ₹1,800 crores budget. CFO reiterated that this is the only non-cement adjacency and RMC has crossed 400 plants nationally.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.