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CARE Ratings has reaffirmed its “CARE AAA; Stable” rating to UltraTech Cement’s long-term and short-term bank facilities worth Rs 13,000 crore and its fixed deposit program worth Rs 74 crore. The rating agency has also acknowledged UltraTech’s sustained market leadership in the Indian cement industry, driven by its diversified and extensive cement capacities across the country. With an installed cement capacity of 177.7 million tonnes per annum (MTPA) in India and 183.1 MTPA globally, UltraTech is poised to further increase its capacity to 188.2 MTPA by the end of FY25 and 214.7 MTPA by the end of FY27.
CARE Ratings has also highlighted UltraTech’s strong financial risk profile, with net debt to profit before interest, lease rentals, depreciation, and taxation (PBILDT) expected to remain around 1.6x by the end of FY25 and improve thereafter. The company’s liquidity position is also considered superior, supported by strong cash flow generation, moderate working capital utilization, and healthy cash reserves.
However, CARE Ratings noted that UltraTech remains exposed to the cyclical nature of the cement industry and volatility in input costs and realizations. Despite this, the agency expects UltraTech to maintain its market leadership and strong credit metrics, continuing to grow its operations through capacity expansion.
The company is currently executing its second and third phases of capacity expansion, including inorganic acquisitions, and aims to reach 209.3 MTPA in India and 214.7 MTPA globally by FY27. The expansion also includes increasing its green power generation capacity to approximately 60% of its power requirements by FY27 and venturing into the cables and wire division with a capital investment of Rs 1800 crore over the next two fiscal years.
As an Aditya Birla group entity, UltraTech Cement is the market leader in the Indian cement industry, with a pan-India presence and a strong track record of performance. The company’s financial performance for the quarter ended December 2024 was steady, with a 2.71% increase in net sales to Rs 17,193.33 crore and a 17.30% decline in net profit to Rs 1,469.51 crore.