UltraTech Cement Q1FY26 Results: Pricing Resilient, but Is Growth Already Factored In? | PL Capital
- 21st July 2025
- 05:00:00 PM
- 3 min read
Mumbai | July 21 – UltraTech Cement reported a 33% year-on-year rise in net profit for the June quarter, aided by firm pricing and steady demand, even as sequential performance moderated amid seasonal weakness and higher costs.
India’s largest cement maker posted a profit of ₹22,300 crore for Q1FY26, compared with ₹16,800 crore in the year-ago period, despite a higher effective tax rate of 26%. Profit, however, declined 17% sequentially, reflecting typical monsoon seasonality and an uptick in input costs.
Demand Recovery Aids Revenue
Revenue for the quarter rose 12% year-on-year to ₹19,630 crore, driven by 7% growth in domestic cement volumes to 33.1 million tonnes. Average blended realization improved 4.5% sequentially to ₹5,939 per tonne, supported by better pricing trends across regions. Domestic grey cement realizations rose 2.1% sequentially to ₹5,155 per tonne, with premium products forming 33.8% of sales during the quarter, up from 30.8% in the previous quarter.
Margins Remain Steady
UltraTech’s standard EBITDA grew 41% year-on-year to ₹4,200 crore, aided by improved pricing and operating leverage. On a per-tonne basis, EBITDA rose 32% year-on-year to ₹1,271 per tonne. Power and fuel costs per tonne fell 8% year-on-year to ₹1,299, partially offsetting a 10.6% rise in raw material costs. Other expenses per tonne declined 7.4% year-on-year to ₹700 due to operating efficiencies.
The company’s green energy mix rose to 39.5% from 35.7% in the previous quarter, with renewable energy capacity now at 1.08 GW and waste heat recovery systems at 363 MW, reflecting continued efforts to reduce energy costs and emissions.
On a consolidated basis, EBITDA grew 45% year-on-year to ₹4,410 crore, with blended EBITDA per tonne at ₹1,197 per tonne for the quarter.
India Cements Shows Sequential Recovery
India Cements, part of the UltraTech group, reported a volume increase of 11.6% year-on-year to 2.18 million tonnes with utilization at 61% for the quarter. The unit’s EBITDA per tonne improved significantly to ₹424 in Q1FY26 from ₹88 in the previous quarter, reflecting an improvement in operating metrics.
Regulatory Challenges in West Bengal
The West Bengal government recently revoked past industrial incentive schemes through a new law, impacting UltraTech’s Sonar Bangla Cement Works unit, which had accrued ₹191 crore in approved incentives under the earlier framework. UltraTech has challenged the revocation in court and has made no provision in its accounts pending the legal outcome.
Expansion and Strategic Moves
During the quarter, UltraTech completed its acquisition of Wonder WallCare, a construction materials company, for an enterprise value of ₹234 crore. The acquisition, approved by the board on April 3, was completed on May 29, making Wonder WallCare a wholly owned subsidiary, further strengthening UltraTech’s value-added product portfolio.
Valuation and Outlook
At its current price of ₹12,498, UltraTech Cement trades at 20.1x FY26E and 16.5x FY27E EV/EBITDA, reflecting a premium valuation in line with its leadership, operational discipline, and market share resilience.
PL Capital maintains an ‘Accumulate’ rating on UltraTech Cement with a target price of ₹13,668, noting that while pricing and cost efficiencies remain supportive, the robust growth outlook appears to be largely priced into the stock. Investors may consider accumulating on dips, with a focus on UltraTech’s steady expansion, cost discipline, and potential upside from any demand acceleration in the second half of the year.
PL Capital
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