UltraTech Cement Limited — Q4 FY25 earnings call

Call held 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

  • 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

Key financials

  1. Volume Growth 9.7%
  2. UltraTech Brand Growth 6.5%
  3. ICL EBITDA/Ton ₹400
  4. Clinker Conversion 1.49×
  5. Lead Distance 370 km
  6. Avg Borrowing Cost 7%

What they filed

Q1 FY27: revenue up 15.9%, net profit up 17.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue16,294 17,779 23,063 21,275 19,607 +20%21,830 +23%25,799 +12%24,648 +16%
EBITDA2,026 2,893 4,608 4,406 3,089 +52%3,911 +35%5,599 +22%5,015 +14%
Net profit708 1,363 2,475 2,221 1,238 +75%1,729 +27%3,000 +21%2,604 +17%
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.

Guidance & targets

Volume

  • Volume Growth FY26 Volume · FY26 · High confidence Double-digit on FY25 base
    On the base of FY '25, we'll do a double-digit growth, definitely.

    — Atul Daga, CFO

Capex

  • Capex FY26 Capex · FY26 · High confidence ₹10,000 crores

    Previously ₹9,000 crores → ₹10,000 crores

    We have close to INR10,000 crores this year.

    — Atul Daga, CFO

  • Cables & Wires Capex Capex · By Dec 2026 · High confidence ≤₹1,800 crores (possible savings)

    From ₹1,800 crores today

    We'll remain within our capex plan of INR1,800 crores, we might have some savings only on that capex plan.

    — Atul Daga, CFO

Margin

  • India Cements EBITDA/Ton Target Margin · FY28 · High confidence >₹1,000/ton
    We are confident of reaching an EBITDA per metric ton in excess of INR1,000 by FY'28.

    — Atul Daga, CFO

  • India Cements Brand Transition Margin · FY27 · High confidence 100% complete
    We should be able to conclude the brand transition program before the end of fiscal '27 next year.

    — Atul Daga, CFO

Capacity

  • Next Phase Growth Announcement Capacity · CY25 or FY26 · High confidence Before end of calendar year or FY26
    Before the end of this calendar or worst case, before the end of this financial year, we will come back with the next phase of organic growth.

    — Atul Daga, CFO

Cost

  • Power & Fuel Costs Cost · Near-term · Medium confidence Range-bound, no increase expected
    It should remain in the range bound. Yes, range bound, not really increase.

    — K.C. Jhanwar, MD

Risks & concerns

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

    medium

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

    Management acknowledged

  • Difficulty splitting organic vs inorganic volume growth creates transparency concerns

    low

    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

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

    low

    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

Areas of evasion (3)

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

Q&A highlights

2 direct
Volume growth calculation and Kesoram split Partial
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

India Cements tolling arrangement and brand economics Direct
Everything is passed on to India Cements, except for a small margin of INR10 a bag or INR200 a ton.

Reveals the tolling arrangement — UltraTech rebrands ICL output and passes back realization minus ₹200/ton marketing margin

Asked by Amit Murarka, Axis Capital

India Cements merger vs standalone entity decision Direct
We are fully cognizant of a huge amount of stamp duty that would be involved. Perhaps in '27 or '28, actually, we will revisit the decision.

Clarifies that merger with India Cements is not imminent due to stamp duty costs; will remain separate for at least 2 years

Asked by Chintan Shah, JM Financial

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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