UltraTech overcomes fuel cost shock to beat Q1 revenue, profit estimates

Mumbai: UltraTech Cement Ltd weathered one of the sharpest fuel cost shocks in recent years to record a better-than-expected April-June quarter, beating analyst estimates on both revenue and profit.

Strong cement demand, double-digit volume growth, contributions from acquired businesses and disciplined cost management helped India’s largest cement producer offset higher fuel and freight costs.

Consolidated net profit attributable to owners of the Aditya Birla Group company increased by approximately 17% YoY ₹2,599 crore in April-June quarter, easily surpassed Bloomberg consensus estimate ₹2,476 crore, according to a survey of 23 analysts.

Similarly, revenue from operations increased by 16% year-on-year. ₹24,648 crore during the quarter, Bloomberg consensus estimate ₹24,107 crore, according to a survey of 24 analysts.

In a post-earnings call with analysts on Monday, UltraTech Chief Financial Officer (CFO) Atul Daga said the company entered FY27 with a solid capacity base supported by double-digit volume growth and strong demand from infrastructure, residential and urban real estate. He said that despite its market leadership, the company would continue to grow “like a competitor.”

UltraTech’s domestic sales volumes rose 13.1% year-on-year to 39.2 million tonnes (mt) in the quarter. Capacity utilization was 81% in the annual domestic installed capacity of 200.1 million tons.

“We have absorbed and are absorbing the sharpest import fuel cost shock in recent times,” Daga said. “And we kept our earnings per tonne essentially flat while growing absolute EBITDA by 12%. This is cost discipline and operating leverage working exactly as designed.”

Even though power, fuel and freight costs increased by approximately 12% compared to the previous year, UltraTech increased its operating EBITDA per ton so far: ₹From 1,214 ₹Consolidated operating EBITDA increased from 1,198 a year ago ₹5,146 crore ₹4,591 crore. EBITDA is an abbreviation for earnings before interest, taxes, depreciation and amortization.

At the same time, Daga warned that the September quarter will be softer; seasonal monsoon slowdown and cost impacts of disruption in West Asia weigh on this quarter”.

Nirmal Bang research analyst Girija Shankar Ray said higher volumes, stable pricing, integration of India Cements (which it acquired in 2024) and cost discipline helped UltraTech limit the impact of higher fuel and packaging costs. As the industry faces projected cost increases ₹At 300-400 per ton, UltraTech’s increase was limited to approximately ₹He said 230-240 per tonne reflects superior cost efficiency.

Ray added that EBITDA per tonne compared well with the first quarter of previous years, which was “a significant achievement, especially given the cost pressures facing the cement sector.”

The company has strengthened its capacity platform following a series of acquisitions and expansion projects.

UltraTech exceeded its domestic gray cement capacity of 200.1 mt in April; 90 mt of this came from acquisitions. The company’s acquisition-led expansion started with the L&T cement business and expanded with deals covering Jaypee, Binani, Century, Kesoram and India Cements.

Including international operations, global gray cement capacity reached 205.5 mt.

Cement prices were “constructive” during the quarter, the CFO said, adding that all-India ex-prices increased throughout June despite the onset of monsoon rains. The issue price is the average spot price at which a 50 kg bag of cement is traded at the end of a particular month or quarter..

“The industry expects prices to remain broadly stable throughout the monsoon quarter due to the impact of increase in costs, which is frankly a constructive outcome for this time of the year,” Daga told analysts.

UltraTech shares rose 1.45% on Monday following the earnings announcement, outperforming the Sensex index, which fell 0.57% on Monday.