India’s two largest cement makers were in a heated race to outdo each other in terms of capacity just a year ago. However, UltraTech and Ambuja Cements have started FY27 on markedly different tracks with the former doubling down on scale and the latter shifting focus to optimisation.
UltraTech Cement is sticking to its playbook. Its management has reiterated that capacity expansion remains central to its strategy, positioning scale as a driver of cost efficiency, market reach and long-term competitiveness. The cement maker added 8 million tonne per annum (MTPA) capacity in FY26 to end the year with 196.8 MTPA with an annual capex of `10,064 crore. In April this year, it crossed the 200 MTPA domestic capacity mark.
“We have committed to add a further 37 million tonne which will take us over 242.5 million tonne in a phased manner by FY28. We see a plan of investing around Rs 8,000-10,000 crore every year for the foreseeable future,” UltraTech CFO Atul Daga said during the earnings call.
Challenger Ambuja Cements, in contrast, is recalibrating its approach. While it continues to execute committed projects and has plans to reach around 119 MTPA by H1FY27, its management has clearly shifted emphasis from expansion to optimisation. The focus now is on improving utilisation of acquired assets such as Sanghi and Penna, driving premiumisation, and expanding margins.
“In FY27, our focus formally remains on streamlining the operations and margin expansion. So, we will continue to focus on trade sales and more so on the premium product sales,” Vinod Bahety, Chief Executive Officer of Ambuja Cements said on the quarterly earnings call earlier this week.
It should be noted that during the FY25 earnings call, the Ambuja management had set a target of 118 MTPA as the exit capacity for FY26. However, its capacity at the end of the previous fiscal was 109 MTPA.
This strategic pivot is accompanied by a moderation in capital allocation. Capex for FY27 is guided at `6,000–6,500 crore — down from FY26 levels of Rs 7,500 crore — with management indicating that spending will remain flexible and contingent on demand and macro environment conditions. The tone marks a departure from earlier ambitions of rapidly scaling capacity to 140 MTPA by FY28.
Bahety said that Ambuja is recalibrating its expansion plans in line with its approach to take advantage of the recent railway policies on bulk cement terminals, with additions to be pursued more gradual in terms and focusing on optimising the current capacities in hand on priority. “This will also help in terms of a very disciplined allocation of capital and a steadfast commitment to maximising the returns on the capital employed,” he added.
With the pull back of its capacity expansion ambitions, Ambuja managed to narrow the gap between itself and UltraTech by 1 MTPA during FY26, instead of nearly 12 MPTA had it achieved an FY26 exit capacity of 118 MPTA.