UltraTech overcomes fuel cost shock to beat Q1 revenue, profit estimates

Mumbai: UltraTech Cement Ltd weathered one of the sharpest fuel cost shocks in recent years to post a better-than-expected April-June quarter, beating analyst estimates on both revenue and profit.

Robust cement demand, double-digit volume growth, contributions from acquired businesses, and disciplined cost management helped India’s largest cement maker offset higher fuel and freight costs.

The Aditya Birla Group company’s consolidated net profit attributable to owners rose nearly 17% year-on-year (y-o-y) to ₹2,599 crore in the April-June quarter, comfortably exceeding the Bloomberg consensus estimate of ₹2,476 crore based on a poll of 23 analysts.

UltraTech Cement's consolidated net profit for Q1 FY27 was ₹2,599 crore, marking a nearly 17% increase year-on-year.

UltraTech Cement overcame rising costs through robust cement demand, double-digit volume growth, contributions from acquired businesses, and disciplined cost management.

The increase in UltraTech Cement's revenue for Q1 FY27 was attributed to strong domestic sales volumes, which rose 13.1% year-on-year, and a revenue growth of 16% year-on-year to ₹24,648 crore.

UltraTech Cement's current capacity utilization for its domestic operations stands at 81% on an installed capacity of 200.1 million tonnes per annum.

UltraTech Cement anticipates a softer September quarter due to the expected seasonal monsoon slowdown and the cost effects of disruptions in West Asia.

Likewise, revenue from operations rose 16% y-o-y to ₹24,648 crore during the quarter, beating the Bloomberg consensus estimate of ₹24,107 crore based on a poll of 24 analysts.

At a post-earnings call with analysts on Monday, UltraTech chief financial officer (CFO) Atul Daga said the company entered FY27 with a robust capacity base, backed by double-digit volume growth and strong demand from infrastructure, housing and urban real estate. Despite its market leadership, he said the company would continue to grow “like a challenger”.

UltraTech’s domestic sales volumes rose 13.1% y-o-y to 39.2 million tonnes (mt) during the quarter. Capacity utilization stood at 81% on an installed domestic capacity of 200.1 million tonnes per annum.

“We have absorbed and are absorbing the sharpest imported fuel cost shock in recent memory,” Daga said. “And we held per tonne earnings essentially flat while growing absolute Ebitda 12%. That is cost discipline and operating leverage working exactly as designed.”

Despite power, fuel and freight costs rising about 12% y-o-y, UltraTech increased operating Ebitda per tonne to ₹1,214 from ₹1,198 a year earlier, while consolidated operating Ebitda rose to ₹5,146 crore from ₹4,591 crore. Ebitda is short for earnings before interest, tax, depreciation and amortization.

At the same time, Daga warned of a softer September quarter “as the seasonal monsoon slowdown and the cost effects of West Asia disruption weigh on the quarter”.

Girija Shankar Ray, research analyst at Nirmal Bang, said higher volumes, steady pricing, the integration of India Cements (which it acquired in 2024), and cost discipline helped UltraTech limit the impact of higher fuel and packaging costs. While the industry faced an estimated cost increase of ₹300-400 per tonne, UltraTech's increase was limited to about ₹230-240 per tonne, reflecting superior cost efficiency, he said.