UltraTech Cement Beats Street Estimates Despite Margins Squeeze

UltraTech rose by 6.81% as investors welcomed the outcomes on Thursday, making it close ₹11,422.70 at BSE. A steep decline in margin was what was expected in its cement business which is now reeling with massive competition. Meanwhile, at other markets, Sensex edged 0.15 percent higher on Wednesday.

Revenue Growth Amid Margin Pressures

UltraTech’s consolidated profit in Q3 at ₹1,470 crore dropped by 17% from the preceding quarter. But consolidated revenue did improve by 3% to ₹17,193 crore from a year ago. Sales volume growth was 10%. EBITDA stood at ₹2,886 crore, 11% lower than last year, and EBITDA margins were down by 265 basis points at 16.8%.

Despite these forces, analysts like Centrum Broking’s Mangesh Bhadang praised the performance of the company. “UltraTech’s Q3 numbers came in better than estimated, mainly driven by a drop in operating expenses and also through volume,” he said. “EBITDA was at 8 percent better than estimated.”

Strategic Steps Enhance Productivity

UltraTech had employed several cost-containment measures such as reducing the lead distance, which stood at 377 km, year-on-year by 20 km. The use of renewable energy rose to 33.4% to meet its power needs, versus 24.1% reported a year ago while falling fuel costs also helped cost containment.

UltraTech continues to invest in growth. During the quarter, it added 1.8 million tonnes per annum (mtpa) to its manufacturing capacity, taking the total to 171.1 mtpa. It is still on course to exceed 200 mtpa by 2026-27, even as the Adani Group heats up competition.

Looking ahead, UltraTech expects India’s cement demand to grow by 7-8% annually, driven by government infrastructure and housing initiatives. Despite a challenging market, the company’s strategic focus on efficiency positions it well for future growth.