UltraTech Cement Limited — Q4 FY26 earnings call

Call held 27 Apr 2026

Management summary

UltraTech Cement delivered a strong Q4 FY26, achieving 200 million tons capacity and robust sales volumes. The company successfully integrated acquired assets and improved profitability per ton, while maintaining a healthy balance sheet and recommending a significant dividend. Despite headwinds from geopolitical events and cost increases, management expressed confidence in passing on costs and achieving double-digit volume growth in FY27.

Highlights

  • UltraTech crossed 200 million tons of cement production capacity in India, a first for any company outside China.

  • Consolidated sales volumes for Q4 FY26 exceeded 44 million tons, with the UltraTech brand growing 19% year-on-year.

  • EBITDA per ton (excluding acquired assets) improved to INR1,296 in Q4 FY26 from INR1,225 in Q4 FY25.

  • Brand migration for India Cements and Kesoram was 100% completed by March '26, ahead of schedule, with India Cements reporting a PAT of INR60 crores in Q4 FY26.

  • The Board recommended a dividend of INR240 per share for FY26, reflecting strong financial flexibility with a net debt-EBITDA of 0.94x.

Concerns

  • The West Asia conflict is identified as a 'real headwind' impacting fuel costs, packing bags, and freight.

  • Rupee devaluation led to a non-cash debit of approximately INR120-130 crores in Q4 FY26 due to mark-to-market adjustments on fully hedged foreign currency borrowings.

  • Bag costs increased by approximately INR90 crores in March, impacting other operating expenses.

Key financials

2 periods

Headline

  • Consolidated Sales Volume
    44 million tons
  • EBITDA per ton (excl. acquired assets)
    ₹1,296
    YoY +5.8%
  • EBITDA per ton (aggregate)
    ₹1,253
  • PAT (India Cements)
    ₹60 Cr
  • EBITDA per ton (India Cements)
    ₹497
    QoQ +62.9%
  • EBITDA (UAE Operations)
    ₹278 Cr
    QoQ +4.1%

FY26

  • Overall PAT
    ₹8,000 Cr

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.

Capital allocation

high confidence
  • Capex ₹8,000 Cr internal accruals
    • Efficiency improvement for India Cements ₹1,592 Cr
    • Capacity expansion for India Cements
    • Kesoram cement assets ₹400 Cr
    • Cable and wire business ₹800 Cr
    We see a plan of investing around INR8,000 crores to INR10,000 crores every year for the foreseeable future. Future capex pipeline remains fully funded and the growth story is intact.
  • Debt 0.9× EBITDA
    • Forex hedge Foreign currency borrowings fully hedged $950 Mn
    Our balance sheet remains robust with a net debt-EBITDA of 0.94x at a consolidated level and 0.92x at UltraTech India level.
  • Dividend ₹240/share (final)
    The Board has recommended a dividend of INR240 a share for fiscal '26.
  • M&A India Cements Acquisition · Integrated

    Brand migration 100% completed, improving operational progress and profitability.

    EBITDA per ton improved to INR497 in Q4 FY26; expected to reach INR1,000+ per ton with investments.

    Brand migration - 100% brand migration has been completed at the end of March '26. In second quarter fiscal '26, 31% of ICL volumes and 55% of Kesoram volumes were carrying UltraTech brand. December '25, they had moved to 58% and 69%. We have completed at the exit of March '26, 100% brand conversion. The EBITDA trajectory - India Cements EBITDA of INR497 per ton in Q4 '26 up from INR333 in Q2 and INR305 in Q3.
  • M&A Kesoram Acquisition · Integrated

    Brand migration 100% completed, improving operational progress and profitability.

    Operating at INR1,000+ EBITDA per ton in Jan-Mar Q.

    Brand migration - 100% brand migration has been completed at the end of March '26... Kesoram, if I look at January, March quarter, it was already operating at INR1,000-plus EBITDA per ton.

Guidance & targets

Volume

  • Sustainable Volume Growth Volume · per annum · High confidence 7-8%
    We expect a sustainable volume growth of 7% to 8% per annum.

    — Atul Daga

  • UltraTech Volume Growth Volume · Next financial year (FY27) · High confidence double-digit growth
    Next financial year. We would target double-digit growth.

    — Atul Daga

Capacity

  • Total Capacity Capacity · by fiscal '28 · High confidence 242.5 million tons
    We have committed to add a further 37 million tons, which will take us over 242.5 million tons in a phased manner by fiscal '28.

    — Atul Daga

Green Energy

  • Power Requirements from Green Sources Green Energy · by the end of fiscal 2030 · High confidence 85%
    We have committed to reach about 85% of our power requirements from green energy by the end of fiscal 2030, and we are very confident of reaching that position.

    — Atul Daga

Cost Efficiency

  • EBITDA per ton (acquired assets) Cost Efficiency · by the end of fiscal '28 · High confidence INR1,000 per ton
    The investment phase is now underway. We had committed INR1,592 crores for India Cements for efficiency improvement, plus another INR400 crores for capex on capacity expansion, this definitely is going to take us over INR1,000 per ton, as committed by the end of fiscal '28.

    — Atul Daga

  • Efficiency Improvement (overall) Cost Efficiency · by fiscal '28 · High confidence higher than INR300 per ton
    I think we will deliver higher than INR300 is what we're looking at... But yes, we will deliver higher than INR300 by fiscal '28.

    — Atul Daga

Clinker Factor

  • Clinker Conversion Ratio Clinker Factor · by fiscal '28 · High confidence 1.54x
    We have targeted to reach about 1.54x. That road map is already there and let's see how things shape up beyond that.

    — Atul Daga

Industry Demand

  • Industry Demand Growth Industry Demand · Q4 FY26 · High confidence 6-7%
    6% to 7% is what my learned team over here tells me.

    — Indrajit Agarwal

  • Industry Demand Growth (Full Year) Industry Demand · Full year FY26 · High confidence 6.5%
    6.5% is what my colleagues tell me for the full year.

    — Atul Daga

What to watch in Q1 FY27

Acquired Assets EBITDA/ton Trajectory

Next quarter (Q1 FY27)
Current India Cements INR497/ton (Q4 FY26), Kesoram INR1,000+/ton (Jan-Mar Q)
Target Continued improvement towards INR1,000+/ton for India Cements

Why it matters

Indicates successful integration and contribution of acquired assets to group profitability.

India Cements EBITDA of INR497 per ton in Q4 '26 up from INR333 in Q2 and INR305 in Q3. ... Kesoram, if I look at January, March quarter, it was already operating at INR1,000-plus EBITDA per ton.

Risks & concerns

  • West Asia conflict impact on costs

    medium

    Conflict is a 'real headwind' on fuel costs, packing bags, freight, and import-dependent supply chains, potentially increasing domestic petrol/diesel prices.

    Whilst I have given an indicative chart in our presentation on where the impact of these rising prices could be, let's be straightforward, it's a real headwind on fuel costs, packing bags and freight, on certain import-dependent supply chains, on near-term sentiment in some demand segments, and the way oil prices are, we could see an increase in domestic prices of petrol and diesel.

    Management acknowledged

  • Rupee devaluation and forex impact

    medium

    Highly volatile rupee devaluation led to a non-cash debit of approximately INR120-130 crores in Q4 FY26 due to mark-to-market of fully hedged $950 million foreign currency borrowings.

    the fact is the way rupee devaluated, I have $950 million of foreign currency borrowings fully hedged. But when you have to do a mark-to-market, you have to take the impact of that currency into account. It hits your EBITDA. INR94.85 was the rupee to dollar 31st March. It strengthened by almost INR1.8 sort of on the 2nd of April, but we have to account for the dollar borrowings at INR94.85. So still it's noncash debit to the P&L but so be it.

    Management acknowledged

  • Increased packing bag costs

    low

    Incremental cost on bags was approximately INR90 crores in March, though prices have since stabilized.

    But bags became a crisis in the month of March and everybody got impacted, the costs went through the roof and our incremental cost on bags was approximately INR90 crores, which is reflected in other costs for the quarter on account of bag costs going up.

    Management acknowledged

  • Temporary regional demand slowdown

    low

    Slowdown in Bengal and Tamil Nadu due to elections and heat, but underlying demand remains strong.

    Too early to say that. We have taken price increases for cement in the month of April. And by and large, we don't see a slowdown in demand, people will have an explanation too much of heat because of which there is a slowdown. Bengal and Tamil Nadu elections resulted in a slowdown just before the last 15 days, you see a slowdown. But generally, I think the undercurrent remains strong.

    Management downplayed

Q&A highlights

6 direct
Payout ratio and capital allocation strategy Direct
I think so, but it will depend on the Board and company's performance. If we perform, if the cement markets do well, I think it should be possible. ... next few years, we are '26 till 2030, '31, I will see INR8,000 crores, INR10,000 crores of capex happening from our balance sheet every year. And as the operating cash flows grow because of our existing size, existing capacities, delivering more and more. The size of operating cash flow keeps increasing, making it very easy for the company to reward its shareholders.

Analyst sought clarity on future dividend policy given strong balance sheet and significant capex plans, and management confirmed potential for higher payouts linked to performance and strong cash generation.

Asked by Rahul Gupta

Impact of West Asia crisis on other opex (bags, forex) Direct
So firstly, on Slide 6, I've just given an indication with what could be a potential impact and this cannot be annualized for the quarter. So please don't panic too much. And yes, in the last quarter, the immediate impact was because everybody has inventories of fuel, so nobody would have really felt the heat of rising prices of fuel. But bags became a crisis in the month of March and everybody got impacted, the costs went through the roof and our incremental cost on bags was approximately INR90 crores, which is reflected in other costs for the quarter on account of bag costs going up.

Analyst asked for quantification of external cost impacts, and management provided specific figures for bag costs and mentioned forex impact, indicating transparency on headwinds.

Asked by Rahul Gupta

Power and fuel cost outlook for June quarter Partial
I don't think there will be too much of an issue in the June quarter and I will urge you, Rahul, to fly down to the White House and do something about it. ... Well, I don't think so it will be too much of a pain. Prices are going up, which is a reality. Selling prices have also been increased to cushion the impact of rising input costs.

Analyst probed on future cost trends, and management gave a somewhat light-hearted but reassuring response, suggesting confidence in managing costs and passing on increases.

Asked by Rahul Gupta

Brand transition impact on realization Direct
Significantly because if I were to look at, let's say, India Cements volumes for the quarter of 3.12 million tons, non-UltraTech volume was 0.39 million tons only. And everybody knows that UltraTech enjoys a premium positioning with brand transition that has definitely helped.

Analyst asked about the benefits of brand migration, and management confirmed its positive impact on realizations due to UltraTech's premium positioning.

Asked by Rahul Gupta

Split of pending efficiency improvement program Direct
As promised and we have delivered it. So we are at almost INR185 per ton on nominal basis, we have completed. And all these programs which are there, which will take us beyond INR300, whilst we had committed INR300, because I'm keeping, let's say, an emergency or a buffer in my pocket, but I think we will deliver higher than INR300 is what we're looking at.

Analyst sought details on cost efficiency targets, and management provided an update on current achievement and reaffirmed the higher target, demonstrating commitment to cost reduction.

Asked by Prateek Kumar

India Cements merger timeline and ring-fencing of UltraTech balance sheet Partial
So, the second question, I think our Chairman himself had said UltraTech's balance sheet is ring-fenced long ago when aspersions were made about UltraTech supporting Voda-Idea. I think those were the days, I'm going back. Not a penny has moved from UltraTech balance sheet for any other purposes. So, we remain committed. ... There are those complicated legal issues, which we have inherited. As I mentioned, we don't want to take any risks with UltraTech, the main company and our main Board. And we are trying our level best to get those cases closed because they are donkey's years old cases and there's been no movement, nothing. Once we are convinced that there is no risk to us. We could look at the next phase of integration.

Analyst raised concerns about the merger and potential balance sheet risks, and management reiterated the ring-fenced nature of UltraTech's finances and the dependency of the merger on resolving legal complexities.

Asked by Ritesh Shah

RMC business strategy and clinker factor target Direct
As for RMC, RMC is an integral part of our business. I don't see a need or don't see that thought process as of now to monetize it. ... We have targeted to reach about 1.54x. That road map is already there and let's see how things shape up beyond that.

Analyst inquired about the strategic direction of the RMC business and clinker factor, and management clarified RMC's integral role and provided a specific clinker factor target.

Asked by Ritesh Shah

Cement industry's ability to pass on cost increases vs other building materials Direct
Fragmentation of the industry is as sweet and small answer, Pinakin, that I can give you. Yes, I think that would sum up everything. ... If demand is robust, prices go up. And you are there, I am also here. On this very day, we'll meet again next quarter. We will talk and we'll demonstrate. I think UltraTech will be steps ahead in terms of performance.

Analyst questioned the cement industry's pricing power, and management attributed it to fragmentation but expressed confidence in UltraTech's ability to outperform and pass on costs if demand remains strong.

Asked by Pinakin

3 min read 7 chapters

Detailed narrative

Q4 FY26 Performance Highlights

UltraTech Cement reported a strong Q4 FY26, with consolidated sales volumes exceeding 44 million tons. The UltraTech brand demonstrated robust growth of 19% year-on-year. EBITDA per ton, excluding acquired assets, reached INR1,296, an improvement from INR1,225 in Q4 FY25, contributing to an aggregate EBITDA per ton of INR1,253. The company also achieved a PAT of INR60 crores for India Cements in Q4 FY26, marking a significant turnaround.

Capacity Expansion and Strategic Milestones

The company achieved a major milestone by crossing 200 million tons of cement production capacity in India, a first for any company outside China. UltraTech has committed to adding a further 37 million tons, aiming for a total capacity of 242.5 million tons by fiscal '28. This expansion is part of a deliberate strategy to build scale, enhance cost efficiency, market reach, and raw material security, with the company ahead of its initial targets.

Integration of Acquired Assets

The brand migration for both India Cements and Kesoram assets was 100% completed by the end of March '26, ahead of schedule. India Cements' EBITDA per ton improved significantly to INR497 in Q4 FY26 from INR333 in Q2 and INR305 in Q3, while Kesoram assets are operating at over INR1,000 EBITDA per ton. The company is investing INR1,592 crores in India Cements and INR400-500 crores in Kesoram for efficiency improvements and capacity expansion, expecting them to become meaningful earnings contributors.

Cost Efficiency and Green Energy Initiatives

UltraTech is actively pursuing cost efficiency, having already achieved INR185 per ton in efficiency improvements and targeting over INR300 per ton by FY28. The company's renewable energy platform is growing, with almost 43% of power needs met from green sources, targeting 85% by FY30. Logistics costs are being optimized through reduced lead distances (367 km) and an expanding bulk terminal network, helping to reduce overall costs.

Capital Allocation and Shareholder Returns

The Board recommended a dividend of INR240 per share for FY26, reflecting confidence in earnings quality and future outlook. The company maintains a robust balance sheet with a net debt-EBITDA of 0.94x (consolidated) and 0.92x (UltraTech India), providing financial flexibility. UltraTech plans to invest INR8,000-10,000 crores annually in capex for the foreseeable future, ensuring fully funded growth without compromising shareholder returns.

Market Outlook and Demand Drivers

Management expects sustainable volume growth of 7-8% per annum, driven by India's urbanization, government infrastructure commitment (e.g., Mumbai's $60 billion infrastructure plan), and housing programs like PMAY. Despite some near-term uncertainties from the West Asia conflict, the underlying demand base remains strong, with the company noting 6-7% industry growth in Q4 FY26 and 6.5% for the full year, indicating an intact structural growth story.

Impact of Geopolitical Events and Cost Headwinds

The West Asia conflict presents headwinds for fuel costs, packing bags, and freight. In March, bag costs increased by approximately INR90 crores. Additionally, rupee devaluation led to a non-cash debit of INR120-130 crores due to mark-to-market adjustments on fully hedged foreign currency borrowings. Management believes these are manageable through diversified sourcing, long-term contracts, and the ability to pass on price increases, which have already begun to cushion the impact.

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