Summary
UltraTech Cement Limited - Q3 FY 2026 Earnings Call Summary Saturday, January 24, 2026, 6:00 PM IST
Event Participants
Executives 2 Atul Daga (CFO and Business Head), Kailash C. Jhanwar (Managing Director)
Analysts 10 Amit Murarka, Andrey Purushottam, Ashish Jain, Girija Ray, Harsh Mittal, Indrajit Agarwal, Jashandeep Singh Chadha, Navin Sahadeo, Pinakin Parekh, Pulkit, Raashi, Rahul Gupta, Ritesh Shah, Shravan Shah, Siddharth Mehrotra
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Clinker Conversion Factor | 1.49x | Improved from 1.45x; target of 1.54x by FY27-28. |
| Net Debt/EBITDA | 1.08x | Consolidated basis; management expects to reach 0.8x-0.9x by FY26 end. |
| Lead Distance | 363 kilometers | Reduction from base of 400km; reflects efficiency in logistics. |
| Green Power Share | 41% | Includes renewable energy and WHRS; target set for 60% by FY27-28. |
| Premium Product Share | 36% | Contribution of premium cement brands to total trade sales. |
| Capacity Utilization | ~90% (Expected) | Projected utilization for Q4 FY26 across existing installed capacity. |
| Fuel Cost | ₹1.8 per kcal | Maintained through efficient sourcing despite global price volatility. |
| Capex (9M FY26) | ₹7,000 - ₹7,200 crores | Full year FY26 spend guided at ₹9,500 - ₹10,000 crores. |
Geographic & Segment Commentary
- North India: Robust demand driven by Punjab’s ₹16,000 crore road initiatives and Delhi Metro’s ₹12,000 crore expansion. UP is developing a 1,575 km metro network and multi-city highway projects like the Barabanki-Mustafabad highway.
- West India: Maharashtra seeing mega projects like the ₹58,000 crore Uttan-Virar Sea Link and road concretization in Mumbai. Gujarat is fast-tracking 9 high-speed corridors (800 km) and major highway projects worth over ₹20,000 crores.
- South India: Labeled “the next North” for demand growth; Bangalore is expanding its metro network to 175 km by 2027. Infrastructure focus includes the ₹10,000 crore Telangana highway expansion and New Mangalore Port capacity growth.
- East India: West Bengal is executing a ₹8,487 crore road program; Bihar is rolling out three major Ganga Road projects worth ₹70,000 crores.
Company-Specific & Strategic Commentary
- Acquisition Integration: Kesoram and India Cements (ICL) integrations are ahead of schedule. Brand conversion reached 69% for Kesoram and 58% for ICL as of December 2025; efficiency capex of ₹382cr (Kesoram) and ₹601cr (ICL) is underway.
- Product Diversification: The Cable and Wires segment is on track for an Oct-Dec 2026 launch; ₹500 crores in orders placed with ₹197 crores already spent.
- Digital and RMC: RMC network now spans 163 cities; bulk cement and RMC (3% of volumes) are growing to meet institutional demand while improving margins.
- Capacity Expansion: Large orders for Phase 4 expansion are placed; 8-9 million tons to be added in Q4 FY26, with another 12 million tons in FY27.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Capacity | 235 mtpa by FY28 | Phased expansion: ~199 mtpa by end of FY26, +12 mtpa in FY27. |
| India Cements EBITDA | ₹1,000/ton by Q4 FY27 | Driven by total brand conversion and ongoing ₹601cr efficiency capex. |
| Industry Demand | 7.5% - 8.0% for FY26 | Management remains confident in demand despite high industry capacity additions. |
| Net Debt/EBITDA | <1.0x by Mar 2026 | All growth to be funded via internal accruals. |
Risks & Constraints
| Risk | Context |
|---|---|
| Input Cost Inflation | Rising pet coke/coal prices and rupee depreciation pose margin risks; management intends to mitigate via price hikes. |
| Regulatory/Legal | India Cements has assets attached due to an ED case; management is seeking legal opinion before deciding on simplifies structures/mergers. |
| Pricing Volatility | While Q4 began with ₹3-₹4/bag price improvements, non-trade pricing remains sharper and subject to institutional negotiation. |
Q&A Highlights
Demand & Pricing
- Question: How will the industry handle high capacity additions regarding pricing? (Amit Murarka)
- Answer: Robust infrastructure pipeline will absorb supply; if demand remains strong, pricing will not be an issue (Atul Daga).
- Question: Are we seeing price hikes in Q4? (Raashi)
- Answer: Naked realization is up ₹3-₹4 per bag, implying market price hikes of ₹6-₹8; the company is currently in a “sold-out” position (Atul Daga).
Asset Integration & Non-Core Sales
- Question: What is the status of non-core asset sales for India Cements? (Ritesh Shah)
- Answer: Sold Indonesian coal mine; discussing land parcels with expected realization of ₹500 crores minimum (Atul Daga).
- Question: What is the current EBITDA/ton for Kesoram? (Raashi)
- Answer: Approximately ₹600/ton this quarter (Atul Daga).
Operating Efficiency
- Question: How much of the ₹300-₹350/ton cost-saving target has been realized? (Jashandeep Chadha)
- Answer: Already delivered ₹86/ton last year; expecting to cross ₹100/ton in efficiency improvements this financial year (Atul Daga).
- Question: Is the captive power cost decline sustainable? (Satyadeep Jain)
- Answer: Driven by fuel efficiency and increasing green energy mix (Atul Daga).
Key Takeaway
UltraTech Cement delivered a robust Q3 FY26, characterized by significant volume growth and operational efficiency beats despite a subdued pricing environment. The company successfully reduced lead distances to 363 km and improved its clinker conversion factor to 1.49x, contributing to ₹86-₹100/ton in realized cost savings. Management highlighted an unprecedented infrastructure pipeline across India, with specific regional projects in Maharashtra, UP, and Bihar expected to sustain 7-9% demand growth. Strategic acquisitions like India Cements and Kesoram are ahead of schedule in brand conversion, which is already lifting margins toward the ₹1,000/ton exit target. With the 235 mtpa capacity target for FY28 remaining intact and a projected Q4 utilization of 90%, UltraTech is leveraging its scale to offset input cost inflation. The company maintains a strong balance sheet with net debt/EBITDA expected to drop below 1.0x by fiscal year-end, positioning it to dominate incremental market capture while improving profitability through a richer mix of premium products and green energy.
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