UltraTech Cement expressed growing optimism about South India’s potential to drive the next wave of industry growth, backed by fresh government spending, political shifts, and commercial activity. “Southern markets are in good shape,” said Atul Daga, Executive Director of Ultratech Cement during an analyst call post the Q1FY26 results.
Southern markets had previously seen some weakness in pricing. Daga remains optimistic on the Southern market amid consolidation and demand growth. He explained, "Our sense is that the South markets are in good shape. We should not feel any negative pressures as of now. Luckily, there are mega projects, which are happening in the Southern states. If I look at the markets, commercial markets for data centers, offices, warehousing, everything is adding up."
Managing Director K.C. Jhanwar added that this outlook was based on a combination of recovering prices and favourable policy developments. “South prices were so low, the entire industry suffered last year. But now, with a new capital being planned in Andhra Pradesh and positive signals from Telangana and Tamil Nadu, we expect demand to pick up meaningfully,” he said. Daga added, "You can say the South is the new North."
UltraTech reported a consolidated YoY volume growth of 9.7% for Q1FY26, including Kesoram Cement and India Cement’s operations, which were formally consolidated from March 2025. The company also corrected its earlier assessment of Q4 FY25 industry demand, revising it from 4 to 4.3 percent growth based on a more comprehensive review of industry capacity utilization.
On pricing, Daga added, "As of now, (overall) prices are favourably poised, in spite of heavy monsoons. The prices have not taken a beating yet. I've seen prices improving in July. This could go back, could help us achieve our targets earlier."
Demand to grow
In a recent pre-earnings report, analysts at Equirus Securities noted that demand in the southern and central regions remained subdued in Q1FY26, primarily due to weaker demand from institutional and government-led projects. "However, we expect a meaningful recovery in the second half of FY26, driven by a low base, renewed government focus on infrastructure execution, and a pickup in industrial capex activity. As these tailwinds materialize, full-year industry growth is projected to improve to around 7–8 percent,” the brokerage had noted.
Overall Daga sees broader macro tailwinds at play. “The government’s CapEx program is gaining steam. We’ve seen an 8.9% YoY increase in national highway construction, and mega projects like Vadhavan Port and the Shaktipeeth Expressway are kicking off,” he said. States like Bihar, Gujarat, Maharashtra, and Andhra Pradesh are outperforming on public infrastructure spending.
Beyond organic growth, UltraTech’s integration of recent acquisitions is advancing rapidly. India Cements, acquired in December 2024, is undergoing a major CapEx-led transformation aimed at cost and energy efficiency.
During the quarter, Ultratech reported a capex of around Rs 2,000 crore and sees a Rs 10,000 crore capex for the year FY2026.
During the quarter consolidated net profit increased by 49 percent Year-on-Year to Rs 2,226 crore. Revenue also jumped by 13% to Rs 21,275 crore in the June quarter FY2026.
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