A decade ago, UltraTech made roughly one in every six bags of cement sold in India. Today it makes closer to one in three
There is a moment in every infrastructure supercycle when one company pulls decisively ahead of the pack. For India’s cement sector, that moment may already have passed and UltraTech Cement shareholders are the ones quietly cashing in.
One-in-Three
A decade ago, UltraTech made roughly one in every six bags of cement sold in India. Today it makes closer to one in three. Market share has climbed from approximately 16% in FY2014-15 to 29% through the first nine months of FY26 — an expansion built on both organic investment and a string of well-timed acquisitions.
“UltraTech has consistently outpaced industry growth led by organic expansion and strategic acquisitions, increasing its market share from ~16% in FY14-15 to ~28% in FY25,” noted Motilal Oswal, adding that the brokerage estimates share will reach approximately 32% by FY28.
A multi-phase capacity expansion has lifted domestic grey cement output from 191.4 million tonnes per annum today to 235.4 mtpa by FY28. Between FY22 and FY25, UltraTech accounted for 38% of all new industry capacity. Going forward, it is expected to capture 28% of the incremental capacity additions announced for FY26-28. No doubt, a slower share of new supply, but that is also on a far larger base.
Good Acquisitions
The two deals that raised eyebrows — the purchases of Kesoram Industries and India Cements — are integrating faster than sceptics expected. Brand conversion at Kesoram has crossed 70%, while India Cements is at 58%. Higher brand recognition under the UltraTech umbrella translates into better realisations and lower distribution friction across a national network that no rival can currently match.
Structured cost-improvement programmes at both acquired units are also underway with benefits expected to flow through from the fourth quarter of FY27 onwards.
The Cost-Saving
Cumulative cost savings of Rs 300-350 per tonne over the medium term has been happening. The company has already banked Rs 86 per tonne in FY25 and is targeting Rs 100 per tonne in FY26. Three levers are doing the heavy lifting — lead distance reduction (already at 363km, ahead of the 375km target), a better clinker conversion ratio (1.49x, improving toward 1.54x), and a rapid shift toward green power, now at 42% of total consumption against a target of 70% by FY27.
“The structured cost-optimisation initiatives are expected to deliver cumulative savings of Rs 300-350 per tonne over the medium term,” says Motilal Oswal.
The payoff shows up in EBITDA per tonne, which is estimated to rise from Rs 964 in FY25 to Rs 1,252 by FY28.
Demand In Higher Gear
Cement volumes were tracking mid-single-digit growth from April through October last year. Then the government’s infrastructure spending accelerated, housing picked up, and suddenly November through January was printing mid-teens growth.
Motilal Oswal estimates consolidated revenue, EBITDA, and profit after tax growing at CAGRs of approximately 12%, 18%, and 22% respectively over FY26-28, with operating margins expanding two percentage points to around 21%.
The Balance Sheet
Net debt spiked to Rs 162 billion in FY25 on the back of acquisitions. That number should not alarm long-term investors. Free cash flow generation is accelerating — cumulative operating cash flow of Rs 501 billion is estimated for FY26-28 alone, against Rs 306 billion over the prior three years. Net debt is forecast to fall to Rs 52.9 billion by FY28, pushing the net debt-to-EBITDA ratio down to a comfortable 0.2x.
Return on equity and return on capital employed are both expected to improve — to 14% and 13% respectively by FY28 — as profitability rises and expansion costs stay disciplined.
No surprise, At 19x FY28 EV/EBITDA, and a target of Rs 15,000, Motilal Oswal is factoring an 18% upside.
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