Ultratech Cement shares rise as it commissions multiple brownfield expansions

Over the past month, the stock of this cement giant has surged by 14 percent

Shares of Ultratech Cement rose mildly to Rs 11,639 apiece on March 27 after the company announced the successful commissioning of multiple brownfield expansions across India, further bolstering its production capacity.

Over the past month, the stock of this cement giant has surged by 14 percent, significantly outperforming the benchmark Nifty 50 index, which recorded a 6 percent increase during the same period.

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UltraTech Cement has commenced operations at a clinker capacity of 3.35 million tonnes per annum (mtpa), along with one of the two planned cement mills (2.7 mtpa) at its Maihar facility in Madhya Pradesh. The second grinding mill is scheduled for commissioning in the first quarter of the financial year 2025-26 (Q1 FY26).

"We are pleased to announce the commissioning of a brownfield clinker capacity of 3.35 mtpa, along with one of the two cement mills with a capacity of 2.7 mtpa at our Maihar unit in Madhya Pradesh. The second grinding mill is expected to be commissioned in the first quarter of FY26," UltraTech Cement stated in a regulatory filing.

In addition to this, UltraTech has completed the brownfield expansion of its grinding units in Dhule, Maharashtra (1.2 mtpa), and Durgapur, West Bengal (0.6 mtpa). The company has also launched its first bulk terminal in Uttar Pradesh, strategically located in Lucknow, with a handling capacity of 1.8 mtpa.

As a result of these expansions, UltraTech’s total domestic grey cement production capacity has now reached 183.36 mtpa, while its overall global capacity, including international operations, has expanded to 188.76 mtpa.

Recently, UBS upgraded its rating on UltraTech Cement, setting a target price of Rs 13,000. The upgrade, along with positive outlooks on other select cement stocks, was driven by UltraTech’s strong execution capabilities even in challenging market conditions, as well as its industry-leading growth and profitability.

Analysts from the research firm noted that they had maintained a negative stance on the cement sector since July 2023 due to a slowdown in demand and intensifying price competition following Adani Group’s entry into the market. However, with these risks now largely accounted for, the analysts anticipate an earnings upcycle to emerge in the financial year 2025-26 (FY26).

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