Scope to grow capacity by 25 MTPA, clinker conversion to reach 1.6x: UltraTech’s Atul Daga

UltraTech is also investing in renewable energy and Waste Heat Recovery Systems.

UltraTech Cement sees the potential to expand its production by an additional 25 million tonnes per annum (MTPA) beyond the current 240.8 MTPA expansion plan, while also boosting its clinker conversion factor to 1.6x, CFO Atul Daga said on the company’s earnings call for the quarter ended September 2025. “We are now stitching our program to reach about 240–245 million tonnes, which will get completed by FY2029. There is definitely scope for 20–25 million tonnes more beyond that,” Daga said.

UltraTech’s incremental capacity of 22.8 MTPA is primarily targeted at northern and western India, after completing the consolidation in the southern markets. The company is also investing in renewable energy and Waste Heat Recovery Systems (WHRS). Daga said the company expects 65% of its energy to come from green sources by the end of the current growth phase.

Daga also noted that their expansion plans are going on full swing, and they we will complete or exit this financial year with 200 million tonnes of capacity under their belt. "There are projects like Vadhavan Port, Amravati Development around the new Mumbai airport. Data centers coming up in the country. Urban real estate ... Google committing $15 billion to build its AI hub in Andhra. All such mega projects are very positive for cement industry for consistent growth, demand," Daga added.

On GST, Daga highlighted the potential premiumization benefit. “Some people will be able to buy their aspirational brands due to a reduction in the cost of purchase,” noting that lower GST on cement makes premium brands like Ultratech more accessible to end consumers, supporting demand growth. He added that with GST while there's no impact on profitability, an important benefit of GST 2 is reduction in clean energy levied on coal. “We believe this will be in a long term interest of UltraTech,” Daga said.

During the quarter, UltraTech sold over 31 million tonnes of cement, with the Ultratech brand growing 13.2%. Rural demand remains strong, expected to grow around 10%, while the rapid brand consolidation of India Cement and Keswaram assets is on track, with full transition expected by June 2026.

Margins in the quarter were impacted by maintenance, staff bonuses, and higher advertising spends, totaling roughly Rs 200 per tonne, though Daga expects partial reversal in the next quarter. Fuel costs are expected to remain stable, with higher coal consumption offsetting petcoke price pressures.

On overall market demand for cement, the management noted that the housing sector, particularly in rural areas, to be the main driver of cement demand, supported by a strong monsoon and revisions in MSP. They added that urban demand is also picking up thanks to recent tax changes and easier access to credit. Similarly, infrastructure projects across roads, railways, ports, and metro networks, along with large commercial developments such as Google’s $15 billion data center in Andhra Pradesh, are expected to provide a long-term boost, particularly in western markets.

UltraTech Cement reported its second quarter net profit at Rs 1,232 crore, a jump of 75% on-year. Revenue also jumped 20% to Rs 19,607 crore compared to Rs 16,294 crore in the same period last year.

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