The country’s largest cement maker, UltraTech Cement, on Monday reported better-than-expected June quarter (Q1FY26) numbers as demand remained resilient from user industries such as infrastructure, housing and real estate. The earnings beat came as cement players undertook price hikes in response to the energy crisis triggered by the Iran war in the said quarter.
The Aditya Birla Group firm’s consolidated net profit rose nearly 17% year-on-year (y-o-y) to Rs 2,599 crore in Q1, ahead of analysts’ estimates of Rs 2,490 crore for the period.
Q1 consolidated revenue rose nearly 16% y-o-y to Rs 24,648 crore during the quarter, beating the Bloomberg consensus estimate of Rs 24,201 crore for the period. Consolidated earnings before interest tax depreciation and amortisation (Ebitda) was up nearly 14% y-o-y to Rs 5,015 crore against a Bloomberg consensus estimate of Rs 4,917 crore for Q1.
Ebitda margins were largely flat at 20.3% in Q1 versus 20.7% reported last year, even as power, fuel and freight costs rose about 12% y-o-y.
Freight and logistics costs typically make up 20-30% of total operating costs for a cement maker, while power and fuel costs account for another 30-40%. Together, they represent the largest portion of a cement company’s total expenses, according to industry experts.
On a per-tonne basis, operating Ebitda grew to Rs 1,214 in Q1, up by Rs 16 versus Rs 1,198 reported a year ago. UltraTech’s domestic sales volumes rose 13.1% y-o-y to 39.2 million tonnes (mt) in Q1. Capacity utilisation stood at 81% on an installed domestic capacity of 200.1 million tonnes per annum. Analysts say demand growth for cement players in Q1 was around 7.5-8% as user industries rushed to complete projects amid delayed rains.
In a post-results analysts’ call, UltraTech’s chief financial officer (CFO) Atul Daga said the company entered FY27 with a robust capacity base, double-digit volume growth and strong demand from user sectors.
“We have absorbed and are absorbing the sharpest imported fuel cost shock in recent memory,” he told investors, adding that the September quarter would likely be soft owing to the advancement of rains.
The company’s investor presentation for the June quarter indicates continued capacity addition in FY27. For the ongoing fiscal, UltraTech has planned to add capacity of 15.9 million tonnes per annum (MTPA), including slag mills at its Visakhapatnam and Patratu facilities. Of that capacity, it has already added 8.7 MTPA in the April-June quarter, it said.
Including capacities overseas, UltraTech expects to finish FY27 with a capacity of 212.7 MTPA. At the end of FY28, it is slated to be 242.5 MTPA, due to significant capacity additions in northern markets, and incremental capacity increases in other parts of India, it said.
UltraTech’s shares rallied after its Q1 financial results were declared during market hours. On the BSE, the company’s shares closed 1.47 % higher at Rs 11,897.90 apiece.