UltraTech Cement: Beneath the shining facade of modern India lies a network of heroes like Ultratech Cement. They work tirelessly to build a strong foundation for the nation’s growth. Even though their story isn’t being splashed often across headlines their work is etched in the towering pillars of the bridges that connect communities and infrastructure that fuels the economic growth.
Every bag of cement they produce becomes a vital element in the symphony of India’s progress. Ultratech expertise ensures every bag of cement which leaves their factories is getting translated into strong foundations for hospitals, homes and vital infrastructure projects.
Schools and Colleges which are built with cement become the breeding grounds for future engineers, doctors and entrepreneurs. They provide sustainable cement solutions along with maintaining high quality standards which contributes to the nation’s social and economic well-being.
Their dedication ensures the future of India is being built responsibly and paves the way for a more prosperous and sustainable tomorrow. Come let’s try to understand all about the company.
Industry Overview
The Indian cement industry is poised for significant growth, baked by government initiatives and robust economic projections. Despite global economic challenges, India is expected to become the fastest-growing major economy. The International Monetary Fund projected India’s GDP growth for 2023 and 2024 will be at 5.9% and 6.3%, which lays a strong foundation for the expansion of the cement industry. The demand for cement in India is predicted to increase by 10% in FY 2023 due to the growth of the housing sector.
Investments and Government initiatives also play a crucial role in boosting cement demand. The Union Budget 2023-24 allocated significant funding for infrastructure, housing and rural development projects. Some of the notable allocations include US $9.6 billion to address the housing shortages and US $1.8 billion for safe housing, sanitation and clean drinking water.
The budget outlay for the National Highway Authority of India (NHAI) and the Ministry of Road Transport and Highways has an increase of 25% and 14% compared to that of the previous year. The cement industry for the third consecutive year of growth in FY 24, is expected to rise by 7-9% reaching approximately 425 million tonnes.
This is being anticipated by affordable rural housing segments and infrastructure development. Government capital expenditure like Production-Linked Incentive schemes and National Logistics Policy also boosts the manufacturing output and creates a positive outlook for the industry.
Company Overview Of Ultratech Cement
Ultratech Cement is an Indian Multinational cement company based in Mumbai. It started its journey back in 1983 as a cement division of Larson & Toubro and was sold under the name L&T Cement. In 2000, because L&T decided to sell its cement business and incorporate a wholly-owned subsidiary it got its name as Ultratech Cement.
The company is the largest manufacturer of white cement, grey cement and ready mix concrete (RMC) in India. Over the years the company has gone into various mergers and acquisitions, becoming one of the largest cement companies in the entire globe excluding China.
Ultratech has manufacturing units, grinding units and bulk packaging terminals across India and has operations in Sri Lanka, Bahrain and UAE. It is the first company in India and the second in Asia to issue dollar-based sustainability-linked bonds.
| Particulars | Amt | Particulars | Amt |
| CMP | 11,584 | Market Cap (Cr) | 3,21,890 |
| Stock P.E (TTM) | 45.6 | Industry P.E (TTM) | 30.65 |
| RoE (TTM) | 11.63% | ROCE (TTM) | 14.46% |
| Debt-to-Equity | 0.19 | EPS (TTM) | 244.5 |
Financials Of Ultratech Cement
| Particulars | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
| Revenue (in crores) | 70,906 | 63,239 | 52,598 | 44,725 | 42,429 |
| Net profit (in crores) | 7003.96 | 5,073.40 | 7,174.34 | 5,318.94 | 5,750.88 |
| ROE | 12.30% | 9.69% | 15.50% | 13.13% | 15.80% |
| ROCE | 15.30% | 12.77% | 14.62 | 14.54% | 11.63% |
In the Financial year 2024, Ultratech Cement saw an increase in revenue by 12.12% to 70,906 crores as compared to 63,239 crores in FY 23. The increase in revenue happened because of increased infrastructure spending by the government and growing housing sector demand.
Future Plans Of Ultratech Cement
Recent Acquisition
The Board of Directors of Ultratech Cement recently approved purchasing 7.06 crore equity shares of India Cements Ltd (ICL). They made this purchase at Rs 267 per share and by doing this they will acquire 23% of ICL’s equity share capital. This move would give Ultratech cement significant influence in ICL’s operations and strategy. This investment could also help Ultratech Cement enhance its market share in the south region since ICL has a strong presence in South India.
Capacity Expansion
Ultratech cement plans to reach 199.6 million tons of total capacity by the end of FY 2027 and for FY 2025, the company expects to add 15 – 17 million tons of new capacity. Ultratech aims to reduce its operating costs by Rs 200 – 300 per ton over the next three years. They wanted to achieve this by improving the blended cement conversion ratio, reducing lead distances and increasing alternate fuel usage. The company wants to increase green power share (Renewable and WHRS) from 24% to 60% by FY 2027.
Capital expenditure
Ultratech plans to have a capex of around Rs 9,500 – 11,000 crores per year for the next 3 years. They are focused on growing the Ready mix concrete business which has a huge potential in this segment. The company aims to reach a net cash position by the end of FY 2025 and plans to complete the Kesoram merger by March 2025.
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