UltraTech Cement posts record FY26 profit amid rising costs, sees demand intact

India’s largest cement maker UltraTech Cement Ltd posted its highest-ever annual profit in fiscal 2026 (FY26) as strong demand helped cushion rising input costs linked to the West Asian war.

The company announced consolidated net profit ₹8,165.64 crore for the year ₹8,000 crore mark for the first time and increased by 35.12% year-on-year; although fuel and energy costs increased by 6% and freight costs increased by 10%, according to foreign exchange applications.

The Mumbai-based company also announced a special dividend. ₹240 per share also signals caution about the evolving geopolitical situation heading into FY27.

Consolidated revenue up 16.53% ₹88,511.53 crore, Bloomberg estimated ₹88,410 crore according to 45 analysts. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 36% ₹17,020.23 crore in FY26.

Consolidated domestic sales volumes for FY25 amounted to 145 million tonnes, an increase of 8.4% compared to FY25.

UltraTech also reported strong fourth-quarter performance despite rising costs; consolidated net profit and revenue increased by 20.17% and 11% respectively. ₹2,982.76 crore and ₹25,799.47 crore.

facing headwinds

“There is real headwinds on fuel cost, packaging bags and freight, some import-dependent supply chains or short-term sentiment in some demand segments,” Chief Financial Officer Atul Daga said in a post-earnings call with analysts, adding that gasoline and diesel prices could rise further in line with global crude oil trends.

For example, the increasing cost of cement bags ₹90 crore, Daga said. Mint It had previously reported that the West Asian war, which started on February 28, had affected the availability of polypropylene, an important raw material used in the production of cement packaging bags. Bori.

According to Daga, the cement maker is taking various measures to reduce the impact of the West Asian conflict, including diversifying supply sources, identifying newer opportunities and signing long-term contracts for fuel.

“In packaging, we also work with nearly 150 suppliers across the country, and naturally, suppliers tend to give priority to customers offering higher volumes,” Daga said.

“The company reported strong earnings on the back of tight cost discipline and higher volumes,” said Manish Valecha, co-head of research and chief cement analyst at Anand Rathi Securities, adding that there could be price hikes in May.

“In an increasing cost environment, higher bag prices and petcoke prices — Ultratech can mitigate the same through effective cost management (long-term connections, different sources, etc.) and price increases,” he said.

Demand is intact

Despite the negativities resulting from conflicts in the 4th quarter, the company’s consolidated sales volumes amounted to 42.41 million tons, an increase of 9.3% compared to the same period of the previous year.

In its statement, the company stated that capacity utilization increased to 89%, driven by strong demand in the residential, infrastructure and commercial construction segments.

Daga thinks demand momentum continues. “Government investment expenditures are flowing. Infrastructure work continues. Housing demand is strong,” he said.

Cement maker expects double-digit growth in volumes in the current financial year and will invest ₹10,000 crore capital expenditure every year for the next 4-5 years.

“We will also see higher contributions from India” “Cements and Kesoram Cement in FY27, this will also help them finance their capital expenditure through internal accruals as well as their own cash flows,” Valecha said.

expansion frenzy

Although short-term costs remain variable, UltraTech continues its aggressive expansion plans.

The company has entered FY27 with an installed capacity of 200 million tonnes per annum (mtpa) in India, Chairman Kumar Mangalam Birla announced at an event in Mumbai on April 17. In the previous fiscal year, its capacity was 183.4 mtpa.

According to the investor presentation, UltraTech plans to add 7.2 million tonnes of capacity this fiscal year and 29.8 million tonnes in FY28. UltraTech is currently the world’s largest cement producer outside China.

In contrast, India’s second largest cement producer Adani Group’s Ambuja Cements has stated that it will prioritize profitability and capacity utilization over rapid growth and may postpone its target of reaching 155 mtpa capacity by FY28. Mint It was previously reported. It currently has a capacity of approximately 109 mtpa.