UltraTech Cement Volumes Jump 12% in Q1 on Infrastructure Demand

UltraTech Cement Ltd. reported a 12% jump in quarterly volumes for the three months through June, driven by infrastructure and housing demand that the company said remains strong despite a fluid geopolitical backdrop.

The company's CFO, Atul Daga, told analysts on a call Tuesday that the quarter began with the West Asia conflict casting a shadow but ended with de-escalation, leaving the demand pipeline across infrastructure, housing and urban real estate "as rich as it can be."

UltraTech, India's largest cement maker, posted a 6.1% increase in net sales to ₹198.2 billion ($2.4 billion) for the fiscal first quarter. Earnings before interest, tax, depreciation and amortization rose 8.2% to ₹47.8 billion, with margins expanding 50 basis points to 24.1%.

Volume growth of 12% to 34.3 million tonnes outpaced the broader industry's estimated 8-10% expansion, according to analysts on the call. Daga attributed the outperformance to UltraTech's expanded capacity base and a strategy he described as "growing like a challenger and not an incumbent."

Cost pressures from energy markets moderated during the quarter. The company's power and fuel costs fell 3.2% from a year earlier to ₹1,540 per tonne, helped by lower petcoke and coal prices. Freight costs, however, rose 4.8% to ₹1,620 per tonne on higher diesel prices and longer lead distances as the company dispatched more material from newer plants.

Daga said the company expects demand to remain robust through the fiscal year, supported by government spending on highways, affordable housing, and the PM Awas Yojana scheme. He noted that the company's capacity utilization ran at 85% in the quarter, leaving room to absorb incremental demand without significant capital expenditure.

UltraTech's net debt stood at ₹94.5 billion as of June 30, down from ₹102.3 billion at the end of March. The company's Alpha Score of 51 on a 100-point scale reflects mixed signals: strong volume momentum offset by rising freight costs and a competitive pricing environment in some regions.

On the call, analysts from Axis Capital, Morgan Stanley, and CLSA questioned Daga about pricing discipline in the southern markets, where new capacity additions have pressured realizations. Daga said the company was "not chasing market share at any cost" but would defend its position where necessary.

UltraTech's stock market analysis page shows the stock has gained 14% over the past 12 months, roughly in line with the Nifty 50 index.