UltraTech says subsidiary India Cements' performance to improve with efficiencies, price increases

UltraTech reported that India Cements has achieved break-even at the EBITDA level

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26 Aug, 2025 12:21

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Aditya Birla Group-backed cement major UltraTech Cement Ltd's management told investors in its post-earnings call on April 28 that the company sees the performance of its newly-acquired subsidiary, the south-based cement firm India Cements Ltd, to improve over the next few years.

UltraTech beat Street estimates in most metrics in its Q4 financial results, but sluggish price growth showed in the form of lower realisations, with the company's FY25 net profit declining year-on-year.

UltraTech, after receiving approvals from the National Company Law Tribunal, took control of India Cements in late-December 2024, marking Q4 as the first full quarter of the latter being a subsidiary of the Aditya Birla Group firm. The company's management told investors that India Cements, which was loss-making when it was taken over, has now achieved break-even at the earnings before interest, taxes, depreciation, and amortisation (EBITDA) level.

Atul Daga, chief financial officer at UltraTech Cement, told investors that the company is spending around Rs 1,500 crore towards efficiency initiatives at India Cements, which will reflect in terms of better operational metrics from the last quarter of FY27.

The investments are being done in things like waste heat recovery system (WHRS), alternate fuel, renewable energy, etc. Renewable energy will happen earlier. WHRS is the most long lead project. All those elements will start delivering returns after completion of work, which is the last quarter of FY27. Improvement in margins by way of prices, by way of cost efficiency, improvement in logistics, cost overhead optimization; practically all elements of the profit and loss statement are getting addressed for improvement," Daga said.

By FY27, Daga added that UltraTech will also complete a re-branding exercise at India Cements, while acknowledging that the latter has strong, well-known brands in the southern markets. India Cements generally markets its products under the Coromandel brand, with Daga adding that it will proceed with a "mix-and-match" approach regarding brand integration. UltraTech will also enter into a tolling arrangement for manufacturing with India Cements, Daga said.

While the company works on improving efficiency at India Cements, it is also identifying brownfield expansion opportunities in the company, Daga said. India Cements has significant land holdings, as well as limestone mine licences, in the crucial southern India market, where UltraTech and its chief rival, Adani Cement (Ambuja Cements and ACC) are vying for market share through both organic and inorganic expansions.

On April 28, UltraTech Cement's shares closed 0.9 percent lower on the National Stock Exchange at Rs 12,128 apiece, while India Cements' stock closed 0.8 percent higher at Rs 290.