UltraTech Cement Ltd Q2FY27 Result Update

Capacity Expansion:

• The company commissioned 4.6 million tonnes of cement capacity during September 2026, taking its consolidated grey cement capacity to 210.1 MTPA.
• UltraTech remains on track to achieve approximately 240 MTPA capacity by FY28, with further organic expansion planned beyond this milestone.
• The company plans to continue expanding its manufacturing footprint, with capacity additions of 16.3 million tonnes targeted for FY27 and 29.8 million tonnes for FY28, as outlined in its investor presentation.

Pricing and Volumes:

• Consolidated sales volume increased 12.9% YoY to 38.22 million tonnes in Q2FY27, while domestic grey cement volumes grew 13.8%, outperforming the industry’s estimated growth of around 10%.
• Management indicated that cement prices strengthened during the second half of September, with trade prices rising by Rs.7-10 per bag month-on-month. October prices have improved further, with spot realisations approximately 5% above the Q2 average.
• Management expects pricing improvements to offset rising input costs and support year-on-year growth in EBITDA per tonne over the next two quarters.
• The South region recorded strong pricing momentum, volume growth and capacity utilisation, while management expects regional profitability to move towards the all-India average.

Operational Efficiency & Cost Optimization:

• Fuel and raw material costs increased amid the West Asia conflict, with fuel costs rising 13% YoY and raw material costs increasing 3% YoY in Q2FY27.
• UltraTech has reduced its dependence on petcoke to approximately 25% of its overall fuel mix, while managing fuel procurement amid constrained domestic coal availability and higher industrial diesel prices.
• Management highlighted that cost pressures may persist in the near term. The company intends to manage these through price increases, product-mix optimisation and continued cost-control measures across fuel, power and logistics.
• Operating leverage is expected to support cost absorption in the coming quarter as capacity utilisation improves.
• The company continues to improve energy efficiency through renewable power and waste heat recovery systems, while expanding alternative fuel usage.

CapEx Plans:

• The company maintained its full-year FY27 capital expenditure guidance at approximately Rs. 10,000 crores, with a more precise estimate expected after Q3 results.
• Capital expenditure stood at Rs. 5,882 crores during H1FY27, reflecting continued investment in capacity expansion and growth initiatives.
• Management expects net debt-to-EBITDA to decline below 1x by the end of March 2027.

Other Key Highlights:

• The Ultravolt wires and cables business, launched on 3 September 2026, is progressing with distribution expansion. Management increased its initial revenue target from Rs. 10,000 crores to Rs. 16,000–18,000 crores, with FY28 expected to be a more mature performance year.
• UltraTech has already established a significant presence in the wires and cables market, with management highlighting its position as the second-largest player by installed copper capacity.
• Management reiterated its ambition to achieve an EBITDA of Rs. 1,400 per tonne, supported by price increases, operational efficiencies and cost optimisation.