UltraTech Q2 preview: Acquisition-led volume growth, stable blended realisations, and cost efficiencies to boost earnings

Segmental performance in RMC and white cement, along with any commentary on future pricing or volume guidance, will also be closely watched.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

UltraTech Cement is expected to post robust gains in revenue and net profit, driven by volume growth, pricing momentum, and operational efficiencies. The cement major is set to announce its Q2FY26 earnings on October 18.

The company's Q2 revenue is expected to see a healthy uptick, with a Moneycontrol poll of eight brokerages projecting an increase to Rs 18,427 crore, up from Rs 15,635 crore in Q2FY25. Net profit is likely to witness a substantial jump, with estimates averaging Rs 1,430 crore, compared to Rs 820 crore in Q2FY25, reflecting both cost efficiencies and margin expansion. Earnings before interest, tax, depreciation and amortisation (EBITDA) margins are expected to improve to around 17 percent, compared with 12.9 percent in Q1, supported by better product mix and operational leverage.

Mirae Asset Sharekhan has the most optimistic forecast, anticipating revenue of Rs 19,278 crore and net profit of Rs 1,715 crore, while Nuvama and Motilal Oswal provide relatively conservative estimates.

What will drive earnings

Overall, Q2FY26 earnings for UltraTech Cement are expected to be driven by acquisition-led volume growth, stable blended realisations, and cost efficiencies.

Volumes

UltraTech Cement’s consolidated volumes are expected to see a seasonal decline, sequentially. “Consolidated volumes are expected to decline by around 14 percent quater on quarter (QoQ) to around 31.8 metric tonnes,” notes PL Capital, reflecting the seasonally weak quarter.

On the other hand, year-on-year (YoY) volumes are expected to be higher, aided by acquisitions, such as ICEM and Kesoram, with PL Capital highlighting a 13 percent YoY increase. Emkay expects “volumes to rise ~17 percent YoY, though down around 12 percent, sequentially, on a consolidated basis,” while MOSL projects a modest like-for-like volume growth of  around 4 percent YoY. JM Financial also observes that “coverage companies, particularly UltraTech Cement, are likely to outperform industry volume growth of 4–5 percent YoY, owing to acquisition-led expansions.”

Realisations and pricing

Pricing trends are expected to have a mixed impact. PL Capital expects UltraTech to report a “2 percent QoQ decrease in average realisation,” while Nuvama notes that “grey cement realisations are expected to fall ~1 percent QoQ due to monsoon.”

JM Financial highlights the possible impact of the GST rate cut, stating that “pan-India cement prices likely declined by around 4 percent QoQ, factoring in the GST rate cut from 28 percent to 18 percent,” though “after adjusting for the tax rate change, effective prices were down by 1.5 percent QoQ, though still up 4–5 percent YoY.” MOSL expects blended realisations for UltraTech to increase 1 percent YoY, while Emkay sees them broadly stable, sequentially.

Cost and profitability
Cost efficiency is expected to support earnings. PL Capital forecasts EBITDA/ton to decline Rs 154/t QoQ to Rs 1,044/t, though remaining +45 percent YoY. MOSL expects variable cost per ton to decline ~4% YoY and opex/t to dip ~3% YoY, with EBITDA/t at Rs 951 and adjusted PAT rising 56% YoY. JM Financial notes that “coverage universe profitability is expected to decline ~INR 200/tn sequentially in Q2FY26, primarily due to lower realisation and operating de-leverage,” while emphasising strong YoY gains from improved pricing (+5 percent YoY).

Segmental revenue growth

UltraTech’s segmental revenues are also expected to contribute positively. MOSL expects Ready Mix Concrete (RMC) revenue to increase 13 percent YoY, while white cement revenue is likely to rise 16 percent YoY. These segments help stabilise revenue amid seasonal softness in cement volumes.

Macro and policy tailwinds

JM Financial points out that “cement companies have passed on the benefit of GST rate cut (from 28-18 percent), after its implementation w.e.f. 22nd Sep’25,” which supports effective pricing. Infrastructure demand, housing projects, and ongoing industry consolidation are expected to maintain pricing discipline and bolster UltraTech’s market share.

What will analysts be watching out for?

Analysts are likely to focus on three key areas during UltraTech’s Q2FY26 results. First, the volume performance, particularly the impact of acquisitions and seasonal softness on both YoY and QoQ growth. Second, realisations and pricing trends, including how the company has managed the GST rate cut and regional price variations. Third, profitability metrics, such as EBITDA per ton and cost- efficiency measures, to gauge operating leverage and margins amid seasonal pressures. Segmental performance in RMC and white cement, along with any commentary on future pricing or volume guidance, will be closely watched.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.