Near-term margin worries for UltraTech Cement

UltraTech Cement's operating profit of first quarter of 2025-26 (Q1FY26) grew 46 per cent year-on-year (Y-o-Y) to ₹4,410 crore and operating profit per tonne increased 33 per cent Y-o-Y to ₹1,197.

- DEVANGSHU DATTA

The margin rose 470 basis points Y-o-Y to 21 per cent. The adjusted net profit increased 44 per cent Y-o-Y to ₹2,250 crore. The company's standalone (excluding India Cement and UAE operations) operating profit of ₹4,200 crore was up 42 per cent Y-o-Y but down 9 per cent quarter-on-quarter (Q-o-Q).

Demand was driven by pick-up in government spending. Rural revival and urban housing demand are likely drivers in the short term. Guidance is for double-digit volume growth (like-for-like) in FY26. The integration of acquired assets (India Cement and Kesoram Cement) is going well.

UltraTech Cement's consolidated revenue was ₹21,280 crore, up 13 per cent Y-o-Y. Volume grew 10 per cent Y-o-Y to 36.8 million tonnes. But standalone volume growth (ex-India Cement) of 2 per cent was low. Blended realisations improved 3 per cent Y-o-Y and 3 per cent Q-o-Q.

Operating expenditure per tonne was down 3 per cent Y-o-Y but up 2 per cent Q-o-Q. The building product segment revenue was ₹185 crore.