UltraTech overcomes fuel cost shock to beat Q1 revenue, profit estimates
Robust cement demand, double-digit volume growth, contributions from acquired businesses, and disciplined cost management helped India’s largest cement maker offset higher fuel and freight costs.
Mumbai: UltraTech Cement Ltd weathered one of the sharpest fuel cost shocks in recent years to post a better-than-expected April-June quarter, beating analyst estimates on both revenue and profit.
Robust cement demand, double-digit volume growth, contributions from acquired businesses, and disciplined cost management helped India’s largest cement maker offset higher fuel and freight costs.
The Aditya Birla Group company’s consolidated net profit attributable to owners rose nearly 17% year-on-year (y-o-y) to ₹2,599 crore in the April-June quarter, comfortably exceeding the Bloomberg consensus estimate of ₹2,476 crore based on a poll of 23 analysts.
Quick answers to key questions
•5
QUESTIONS
UltraTech Cement's consolidated net profit for Q1 FY27 was ₹2,599 crore, marking a nearly 17% increase year-on-year.
UltraTech Cement overcame rising costs through robust cement demand, double-digit volume growth, contributions from acquired businesses, and disciplined cost management.
The increase in UltraTech Cement's revenue for Q1 FY27 was attributed to strong domestic sales volumes, which rose 13.1% year-on-year, and a revenue growth of 16% year-on-year to ₹24,648 crore.
UltraTech Cement's current capacity utilization for its domestic operations stands at 81% on an installed capacity of 200.1 million tonnes per annum.
UltraTech Cement anticipates a softer September quarter due to the expected seasonal monsoon slowdown and the cost effects of disruptions in West Asia.
Likewise, revenue from operations rose 16% y-o-y to ₹24,648 crore during the quarter, beating the Bloomberg consensus estimate of ₹24,107 crore based on a poll of 24 analysts.
At a post-earnings call with analysts on Monday, UltraTech chief financial officer (CFO) Atul Daga said the company entered FY27 with a robust capacity base, backed by double-digit volume growth and strong demand from infrastructure, housing and urban real estate. Despite its market leadership, he said the company would continue to grow “like a challenger”.
UltraTech’s domestic sales volumes rose 13.1% y-o-y to 39.2 million tonnes (mt) during the quarter. Capacity utilization stood at 81% on an installed domestic capacity of 200.1 million tonnes per annum.
“We have absorbed and are absorbing the sharpest imported fuel cost shock in recent memory,” Daga said. “And we held per tonne earnings essentially flat while growing absolute Ebitda 12%. That is cost discipline and operating leverage working exactly as designed.”
Despite power, fuel and freight costs rising about 12% y-o-y, UltraTech increased operating Ebitda per tonne to ₹1,214 from ₹1,198 a year earlier, while consolidated operating Ebitda rose to ₹5,146 crore from ₹4,591 crore. Ebitda is short for earnings before interest, tax, depreciation and amortization.
At the same time, Daga warned of a softer September quarter “as the seasonal monsoon slowdown and the cost effects of West Asia disruption weigh on the quarter”.
Girija Shankar Ray, research analyst at Nirmal Bang, said higher volumes, steady pricing, the integration of India Cements (which it acquired in 2024), and cost discipline helped UltraTech limit the impact of higher fuel and packaging costs. While the industry faced an estimated cost increase of ₹300-400 per tonne, UltraTech's increase was limited to about ₹230-240 per tonne, reflecting superior cost efficiency, he said.
Ray added that the Ebitda per tonne compared well with first quarters of previous years, “which is a significant achievement, particularly given the cost pressures the cement industry is facing”.
The company has strengthened its capacity platform following a series of acquisitions and expansion projects.
UltraTech crossed 200.1 mt of domestic grey cement capacity in April, of which 90 mt came through acquisitions. The company’s acquisition-led growth began with the L&T cement business and expanded through deals involving Jaypee, Binani, Century, Kesoram and India Cements.
Its global grey cement capacity, including overseas operations, reached 205.5 mt.
Cement prices have been “constructive” during the quarter, the CFO said, adding that all-India exit prices improved through June, even as the monsoon now sets in. Exit price is the average spot price at which a cement bag of 50kg is trading at the end of a specific month or quarter.
“Industry expects prices to hold broadly steady through the monsoon quarter due to the impact of increase in costs, which frankly is a constructive outcome for this time of year,” Daga told analysts.
UltraTech shares rose 1.45% on Monday after the earnings announcement, outperforming the benchmark Sensex, which fell 0.57% on Monday.
About the Author
Dipali Banka
Dipali Banka is a Mumbai-based journalist who treats corporate reporting less like a beat and more like a puzzle to be solved. This invariably means she has to read through annual reports and speak with leaders and analysts. She tracks policies, deals, and the pulse of industries spanning metals, mining, paints, and cement, alongside aviation. She started out as an intern at The Statesman and then completed her postgraduate diploma in journalism from Asian College of Journalism, Chennai, in 2025. Relentlessly curious at heart, Dipali is driven by the simple urge to understand how things work and who they impact. Armed with an enduring fascination for steel and aeroplanes, she moves through the churn of daily news with focus, turning complexity into clarity without losing the story. She is particularly committed to shaping numbers into objective narratives, having little appetite for vagueness that gets in her way.
Outside the newsroom, Dipali is an unapologetically loud presence who values long conversations and longer walks to unwind. She devours books of all kinds and can often be found indulging in the lyrical sway of contemporary ghazals. She ardently believes that her relationship with her bylines is more sacred than it would ever be with anyone across the human race.
Source: Livemint — Companies
