Ultratech’s Volume Game Needs More Support from Price

The pace of Government’s Capital Expenditure for Infrastructure Projects in Bihar, Andhra Pradesh, Gujarat and Maharashtra was better in Q1fy26 Than Last Year, The Management Said. Ultratech Expects Government Capex to Generate Healthy Cement Demand.

Consequently, Ultratech is confident of achieving double-digit Volume Growth in FY26, Outpacing The Industry’s Growth Estimate of Mid-to-High Single Digits.

The company’s consolidated green cement Volume Grew 9.7% Year-On-Year to 36.83 Million Tonnes (MT) In Q1Fy26. This include contributions from acquisitions and sales in the overseas market. Domestic Grey Cement Volume Rose 8.7% Year-On-Year to 34.64 Mt. “Like-to-LIKE VOLUMES ROSE 3% Year-On-Yaar, which would be slightly below industry,” said an HDFC Securities Report on 22 July.

But expectations are running high. Ultratech Block Deliver 11% Volume Cagr during FY25-27, LED by Around 9% Core Core Volume Cagr and The Rest Coming from Gradual Ramp-up of India CEMENTS and Kesoram, Estimates HDFC.

Over this time, it estimates Ultratech’s Consolidated Ebitda Cagr at 34%, Aided by Margin Expantion for Core Operations and Accquired Assets.

Ebitda growth was 46% in Q1fy26 to 4,410 Crore, broadly in line with Consensus Expectations. Volumes and market share would also get a leg-up from continued thrust on timely capacity expansions.

Ultratech Commissioned 3.5 MTPA (Million Tonnes per annum) capacity in Q1fy26. It plans to add 11 mtpa in fy26 and another 15 mtpa in fy27, thus increasing its manufacturing capacity to 212.2 MTPA by FY27 from 187 MTPA Currently.

Ultratech intends to annues the next phase of its growth plan by fy26-end. The company has earmarked 10,000 Crore Capex for Fy26 Mainly to Scale-up operations and Spent Around 2,000 Crore in Q1fy26.

On the Flipseide, Aggressive Capex May Keep Debt Elevated in the Near Term. AMID This, Ultratech Continues to Maintain a Tight Leash on Costs and Target to Lower Opex by 300/mt over the next two-three years. This would be driven by the rain power of green power and Reducing Lead Distance Reduction, Among Other Measures.

These positive factors have to lent comfort to investor sentiment, even as the sector’s pricing trends are dynamic and outs a risk. Still, Ultratech Shares Hit A New 52-wheelk high of 12,714 on Monday after Q1fy26 Results. Grey Cement Realization Improved by 2.2% Sequationally in Q1fy26 (Excluding India Cements).

Price Increases were Led by the southern and Eastern Markets with the Latter Continuing its upward journey in July. Northern and Western Markets Saw Stable Pries as They were already high. Current Cement Prisis are Higher Versus Q1fy26 Exit price, The management said and expects cement prises to improve further in fY26.

But as Yes Securities Points Out, Despite A Large Presence in the Southern Region (Around 53 MTPA, Including Kesoram & India Cements), WHERE CEMENT PRICES ROSE 13% Sequentially in Quen Ultratech’s Realization Gain Was MUTED.

This was partly due to brand-related challenges as ultratech’s pricing for India kements was not well-contained in the market, said the yes securities report. While all-India Average Cement Pries Rose by 5.4% Sequationally, Despite Being A PAN-India Player, Ultratech Did Not Benefit Significantly From The Price Hike, IT Added.

Meanwhile, the stock has risen 8.5% so far in 2025, Slightly ahead of Benchmark Index Nifty50’s 6% Returns. It trades at FY27 EV/Ebitda of Around 18x, Showed Bloomberg Data. Valuation is a premium to competitors ACC Ltd and Ambuja Cements Ltd.