NEW DELHI: Cement maker UltraTech, which expects around 7 per cent growth in FY26, has allocated up to Rs 10,000 crore as capex to bolster its capacity as well as energy and efficiency initiatives, according to the company’s latest annual report.
The Aditya Birla group firm recently acquired South-based India Cements and the cement business of Kesoram Industries, and added 26.3 MTPA of grey cement capacity to its portfolio. It has planned an organic capacity addition of 28.8 MTPA by FY27.
UltraTech, which crossed the Rs 75,000 crore revenue mark in FY25 and is now very close to 200 MTPA (million tonnes per annum) capacity, anticipate a reduction in “net debt to EBITDA ratio”, helped by a higher volume growth and improving margins.
“Although our net debt to EBITDA (pre-tax profit) ratio rose to 1.33x in March 2025, we anticipate higher volume growth and an improving EBITDA profile to reduce this rapidly,” its Managing Director K C Jhanwar said while addressing the shareholders.
Like other cement makers, UltraTech also faced a lowered sales realisation amidst tepid demand conditions last year, which marginally declined its EBITDA (earnings before interest, taxes, depreciation and amortisation) compared with FY24.
The cement demand has reached approximately 435 million tonnes in India, and with tailwinds such as continued government focus on infrastructure development, affordable housing, and urbanisation is expected to bolster the demand further, the company said.
Moreover, the government in its Union Budget allocated Rs 11.21 lakh crore for the infrastructure sector, providing further tailwind to demand for cement.
“While cement demand moderated to 4-5 per cent in FY 2024-25 owing to a temporary slowdown in government infrastructure spending and a prolonged monsoon, it is likely to rebound to 6-7 per cent in FY 2025-26,” Jhanwar added.
He further said UltraTech added 42.6 MTPA of consolidated grey cement capacity through organic and inorganic growth in FY25, taking total capacity to 188.8 MTPA.
As of June 30, 2025, the company’s consolidated capacity has reached 192.26 MTPA and is accelerating its journey towards the 200 MTPA capacity milestone, he added.
On scaling up the capacity, Jhanwar said, besides acquisitions of India Cements and Kesoram Industries, the company has added 16.3 MTPA through organic expansions, which accounted for 55 per cent of India’s total cement sector expansion in FY25, reinforcing its industry-leading position.
On India Cements and Kesoram, he said the two entities have significantly strengthened our footprint in the attractive South India market.
“We are unlocking further value through energy and efficiency initiatives. For instance, at the erstwhile Kesoram units, we are expanding green energy capacity by 107 MW to enhance operational efficiencies,” he said.
For India Cement, which achieved EBITDA break-even in the March 2025 quarter after efficiency improvements, UltraTech said “a capex plan is being made for investments over the next two years for improvement in all areas of operations to bring these assets at par with UltraTech standards”.
UltraTech is facing competition from Adani group firm Ambuja Cements, which is also adding capacity through acquisitions and pacing up organic capacity addition at existing units.
It has crossed 100 MTPA capacity in FY25 in a record time, mainly through acquisitions, and now aims to reach 118 MTPA by FY2026 and 140 MTPA by FY2028.
Adani Group, which jumped into the Cement sector in September 2022 after acquiring controlling stakes in Ambuja Cement from Swiss firm Holcim for cash proceeds of USD 6.4 billion (about Rs 51,000 crore), owns ACC Ltd. Later, it acquired small companies such as Hyderabad-based Penna Cement, Saurastra-based Sanghi Industries and Orient Cement from the CK Birla group.
