CARE Ratings Reaffirms Ratings for UltraTech Cement Ltd Amid Capacity Expansion Plans
CARE Ratings Limited has reaffirmed the ratings for the Long Term and Short Term Bank facilities of UltraTech Cement Limited while withdrawing the rating for the fixed deposit issue due to no outstanding amount. The reaffirmed ratings are CARE AAA; Stable for the Long Term bank facilities and CARE AAA; Stable / CARE A1+ for the Long Term / Short Term bank facilities.The rating action, detailed in the provided data, outlines the status of UltraTech Cement Limited's key financing instruments.
| Facilities/Instruments | Amount (₹ crore) | Rating 1 | Rating Action |
|---|---|---|---|
| Long-term bank facilities | 2,400.00 | CARE AAA; Stable | Reaffirmed |
| Long-term / Short-term bank facilities | 14,700.00 | CARE AAA; Stable / CARE A1+ | Reaffirmed |
| Fixed deposit | - | - | Withdrawn |
Business Strength and Expansion Drivers
CARE Ratings noted that the sustained market leadership position of UltraTech Cement Limited is supported by its large and well-diversified cement capacities across India. As of December 31, 2025, UltraTech possessed the largest installed cement capacity in India at 188.66 million tonne per annum (MTPA). Including 5.4 MTPA of overseas cement capacity in the UAE, the overall grey cement capacity stands at 194.06 MTPA.The company is actively engaged in capacity expansion, initiating the next phase to add 22.8 MTPA through a combination of brownfield and greenfield projects, with work progressing as scheduled. Upon completion of this expansion phase, the company's installed capacities are projected to reach 240.8 MTPA by FY28.
Beyond grey cement capacity, the expansion plans include increasing green power generation capacity to approximately 60% of expected power requirements by FY27-end. Furthermore, the company aims to enhance its Waste Heat Recovery System (WHRS) capacity from 383 MW as of December 31, 2025, to 500 MW by FY27-end, while increasing renewable power from 1.28 GW as of December 31, 2025, to 2 GW by FY27 end.
The company has also announced an entry into the cables and wire division, involving a capital investment of ₹1,800 crore over the next two fiscal years. As of December 31, 2025, ₹500 crore worth of orders had been placed for this segment, with revenue largely anticipated from FY28 onwards.
Operational Efficiencies and Financial Health
The rating assessment credited UltraTech with sound operating efficiencies derived from its highly integrated operations. These include captive thermal power plants (TPP) of 1,333 MW, WHRS of 383 MW, and renewable energy capacity (solar and wind energy) of 1.28 GW as of December 31, 2025, alongside captive limestone reserves. The operational footprint is further enhanced by the presence of split grinding units (GUs) and bulk terminals, facilitating market reach across India.Financially, the company's profile is characterized by a healthy capital structure. The net debt to profit before interest, lease rentals, depreciation, and taxation (PBILDT) was 1.89x by FY25 ending and is anticipated to reduce to approximately 1.3x in FY26, with further expected strengthening through incremental operational efficiencies from acquired assets and controlled debt accretion.
For reference, a summary of key financial figures shows the following:
| Metric | March 31, 2024 (₹ crore) | March 31, 2025 (₹ crore) | 9MFY26 (₹ crore) |
|---|---|---|---|
| Total operating income | 70028 | 75955 | 62,712 |
| PBILDT* | 12074 | 12557 | 11,910 |
| Profit after tax (PAT) | 7004 | 6040 | 5,188 |
| Overall gearing (x) | 0.32 | 0.5 | NA |
| Interest coverage (x) | 12.66 | 7.61 | NA |
Industry Outlook and Key Risks
While the rating outlook remains 'Stable', CARE Ratings highlighted that the company remains exposed to the cyclical nature of the cement industry and volatility in input costs and realizations. Ongoing geopolitical tensions may impact pet coke prices, though the company benefits from having sufficient raw material reserves for 3-4 months of operation.The sector's reliance on raw materials such as gypsum, fly ash, and slag, alongside fuel costs from coal and pet coke, presents commodity price risk.
Regional Reach and Market Presence
UltraTech Cement maintains a pan-India presence through 35 integrated units (34 in India and one overseas), 34 grinding units (30 in India and four overseas), and various terminals and units across India, the UAE, Bahrain, and Sri Lanka. As of December 31, 2025, regional capacities were recorded as follows:- South India: 50.5 MTPA
- North India: 37.5 MTPA
- West India: 34.5 MTPA
- East India: 33.3 MTPA
- Central India: 32.9 MTPA
- Overseas: 5.4 MTPA
ULTRACEMCO Stock Price Movement
On Friday, UltraTech Cement Limited shares edged higher, closing at ₹11589 after climbing 1.40% from the previous session's levels. The stock saw notable activity, with a total traded volume amounting to 420,339 shares.Source:
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