Imagine a world where no skyscrapers touch the sky, no highways connect cities, and no homes provide shelter. Cement is the silent force behind modern infrastructure, shaping the world we live in. In India, UltraTech Cement stands as the market leader, contributing significantly to the country’s construction boom. But is it a good investment opportunity?
Let’s dive deep into UltraTech’s business, financials, growth prospects, and risks to uncover its investment potential.
Stock Overview
| Ticker | ULTRACEMCO |
| Industry/Sector | Construction Materials (Cement) |
| Market Cap (₹ Cr.) | 3,01,926 |
| Free Float (% of Market Cap) | 39.45% |
| 52 W High/Low | 12145.35 / 9250.00 |
| P/E | 48.31 (Vs Industry P/E of 40.52) |
| EPS (TTM) | 216.29 |
About Ultratech Cement
UltraTech Cement, a subsidiary of the Aditya Birla Group, is India’s largest and the world’s third-largest cement maker (ex-China) with a capacity of 150.7 MTPA. Operating across India, UAE, Bahrain, and Sri Lanka, it supports infrastructure growth through its vast network of 34,500 dealers, 1,03,200 retailers, and 321 RMC plants.
The company plans to expand its domestic grey cement capacity to 183.5 MTPA by FY27, investing ₹28,000-30,000 crore. Committed to sustainability, UltraTech aims to increase its green power share to 85% by FY30, using waste heat recovery and renewable energy.
Key business segments
UltraTech Cement’s key segments include:
- Grey cement: Contributes over 90% of revenue, used in construction.
- White cement: Sold as Birla White, for aesthetic applications.
- RMC: Ensures quality and speed for infrastructure projects.
- Building products: Offers waterproofing, tile adhesives, and wall putty.
- Overseas operations: Presence in UAE, Sri Lanka, and Bahrain.
Primary growth factors for Ultratech Cement
- Infrastructure push: Government projects like PMAY and Smart Cities drive demand.
- Housing revival: Urbanization and higher incomes boost residential construction.
- Capacity expansion: Targeting 200 MTPA by 2030.
- Sustainability: Investing in WHRS, alternative fuels, and carbon reduction.
- Consolidation: Acquisitions like Century and Jaypee Cement strengthen leadership.
Detailed competition analysis for Ultratech Cement
Key Financial Metrics – FY 24;
| Company | Revenue(₹ Cr.) | EBITDA(₹ Cr.) | EBITDA Margin (%) | PAT(₹ Cr.) | PAT Margin (%) | P/E (TTM) |
| Ultratech Cement | 70908.14 | 12968.56 | 18.29% | 6981.95 | 9.85% | 48.31 |
| Ambuja Cements | 33159.64 | 6399.51 | 19.30% | 4715.11 | 14.22% | 28.07 |
| Shree Cement | 20520.98 | 4516.74 | 22.01% | 2396.16 | 11.68% | 80.99 |
| ACC Ltd. | 19958.92 | 3061.66 | 15.34% | 2323.61 | 11.64% | 13.42 |
| JK Cement Ltd. | 11556.00 | 2059.80 | 17.82% | 789.93 | 6.84% | 45.82 |
Key insights on Ultratech Cement
- Achieved double-digit revenue CAGR over 10, 5, and 3 years at 13%, 11%, and 17%, respectively, reflecting sustained demand in the construction sector.
- Maintains steady EBITDA margins of 16-18% over the last three years, showcasing operational efficiency.
- Profit CAGR of 24% over 5 years and 13% over 10 years, driven by cost optimisation and strong volume growth.
- Strengthened financial position with debt-to-equity reducing from 0.59 in FY20 to 0.17 in FY24, enhancing financial stability.
- Improved ROCE from 11.84% in FY20 to 15.42% in FY24, demonstrating better capital efficiency.
- Maintains a healthy dividend payout of 21.8%, reinforcing shareholder value creation.
- Market leadership with a 22% market share, enabling pricing power and economies of scale.
Recent financial performance of Ultratech Cement for Q3 FY25
| Metric | Q3 FY24 | Q2 FY25 | Q3 FY25 | QoQ Growth (%) | YoY Growth (%) |
| Revenue (₹ Cr.) | 16739.97 | 15634.73 | 17193.33 | 9.97% | 2.71% |
| EBITDA (₹ Cr.) | 3254.57 | 2018.27 | 2887.09 | 43.05% | -11.29% |
| EBITDA Margin (%) | 19.44% | 12.91% | 16.79% | 388 bps | -265 bps |
| PAT (₹ Cr.) | 1769.02 | 826.62 | 1474.77 | 78.41% | -16.63% |
| PAT Margin (%) | 10.57% | 5.29% | 8.58% | 329 bps | -199 bps |
| Adjusted EPS (₹) | 61.55 | 28.40 | 50.90 | 79.23% | -17.30% |
UltraTech Cement financial update (Q3 FY25)
UltraTech Cement reported a strong performance in Q3 FY25, with revenue and volume growth exceeding expectations, while EBITDA and PAT declined YoY due to pricing pressures.
- Revenue grew 10% QoQ, supported by higher realisations and volume growth.
- Volumes increased by 3% QoQ to 30.37 MTPA (Grey & White Cement).
- EBITDA declined 11% YoY, while PAT fell 17% YoY to ₹1,475 crore (vs. ₹1,769 crore in Q3 FY24).
- EBITDA margin stood at 16.8% (vs. 19.4% YoY), impacted by lower realisations.
- EBITDA per tonne was ₹951, down 20% YoY, but up 31% QoQ, driven by cost efficiency measures.
- Blended realisation per tonne stood at ₹5,661, down 8% YoY but up 1% QoQ.
- Cost per tonne declined 4% QoQ and 5% YoY to ₹4,711, aided by lower power, fuel, freight, and other expenses.
Operational highlights
- Clinker capacity addition: 6.7 MTPA added in 9M FY25.
- Domestic volume growth: 10.5% YoY to 28.1 MT in Q3 FY25.
- Regional price trends: Northern and Western markets saw the highest price improvements (~3% QoQ), while Central, Southern, and Eastern markets witnessed moderate growth.
- Realisations declined 9.6% YoY to ₹4,970 per tonne but improved 1.4% QoQ.
Capacity Expansion
- Targeting 185 MTPA cement capacity by FY25, including Kesoram and ICL acquisitions.
- Q4 FY 25: 3.35 MTPA clinker capacity addition planned.
- FY26: Expected addition of 10-15 MTPA cement capacity and ~10 MTPA clinker capacity.
- Capex allocation: ₹3,000 crore for Q4 FY25, ₹9,000 crore for FY26, and ₹6,000-₹7,000 crore for FY27 (excluding ICL and Kesoram).
- Debt reduction planned from FY26, improving financial stability.
Company valuation insights – Ultratech Cement
UltraTech Cement trades at a TTM P/E of 48.31, above the industry average of 40.52, reflecting its market leadership. The stock gained 8.5% in the past year, outperforming the Nifty 50’s 1.7% rise. With large players expected to grow market share to 65%-70% by FY27-28, UltraTech’s share could rise from 25% to 28%.
Cement demand is projected to grow at 7%-8% CAGR over FY 24-27, while UltraTech expects volume, revenue, EBITDA, and PAT to grow at 11%, 11%, 19%, and 28% CAGR, respectively.
At ₹10,458, it trades at 21x EV/EBITDA. Applying the same multiple to FY26E EBITDA of ₹17,341 crore, the target price is ₹12,220, offering a 17% upside. With robust expansion plans and operational gains, UltraTech remains a solid long-term bet.
Major risk factors affecting Ultratech Cement
- Input cost volatility – Rising coal, pet coke, and freight costs can impact margins.
- Regulatory challenges – Environmental regulations and mining restrictions can pose operational risks.
- Cyclical nature – Cement demand is linked to economic cycles; a slowdown can impact earnings.
- Intense competition – Players like ACC, Ambuja, and Shree Cement are constantly expanding, increasing price competition.
- Global slowdown – Overseas operations may face demand fluctuations due to global economic downturns.
Technical analysis of Ultratech Cement share
UltraTech Cement has broken down from an ascending channel on the weekly chart, indicating short-term weakness. It trades below its 50-week moving average but remains above the 100- and 200-week levels. A breakdown below ₹9,300 could lead to further downside, while a move above ₹11,000 could drive it toward ₹12,220.
On the daily chart, UltraTech trades below key moving averages, with RSI at 39.04 near oversold territory. While the MACD is negative, a potential crossover suggests a buy signal. The ADX at 35.09 indicates a strong trend. Despite short-term weakness, a bounce from support or a breakout could reignite bullish momentum.
RSI: 39.04 (Near Oversold)
ADX: 35.09 (Trending)
Resistance: ₹12,200
Support: ₹9,300
Ultratech Cement stock recommendation
Current Stance: Buy with a target price of ₹12,220 (12-month horizon); near-term input cost fluctuations are possible, but long-term fundamentals remain strong.
Why Buy Now?
Industry Leadership: UltraTech’s market share is set to grow from 25% to 28% by FY27, benefiting from consolidation.
Strong Demand & Pricing Power: Cement demand is expected to grow at 7%-8% CAGR over FY 24-27, supported by infrastructure and housing growth.
Expansion & Efficiency: UltraTech’s capacity growth and cost efficiencies through green energy and better logistics will enhance margins.
Attractive Valuation: Trading at 21x EV/EBITDA, the stock offers a favourable risk-reward with strong growth potential.
Portfolio Fit
UltraTech’s dominant position in the cement industry, focus on capacity expansion, cost optimisation, and improving profitability make it a solid long-term investment.
With steady earnings growth, pricing power, and operational efficiencies, the stock is well-suited for investors looking for consistent compounding in the infrastructure and real estate sectors.
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- Infrastructure push: Government projects like roads, highways, and PMAY will boost cement demand.
- Capex-led growth: Industrial corridors and logistics parks will drive construction activity.
- Sustainability focus: Support for renewable energy and carbon-neutral production enhances cost efficiency.
- Urban & Rural development: Smart cities and rural infrastructure programs will spur demand.
- PLI impact: Factory construction and warehousing expansion will support long-term cement demand.
Final thoughts
UltraTech Cement is a formidable player with strong financials, consistent growth, and a well-defined expansion strategy. While near-term risks exist, its market dominance, cost efficiency, and long-term infrastructure demand make it a compelling stock for long-term investors. For those looking to bet on India’s infrastructure story, UltraTech Cement is a rock-solid choice!
