CARE Ratings Reaffirms Strong Credit Profile of UltraTech Cement Ltd Amid Market Leadership
CARE Ratings Limited has affirmed the strong creditworthiness of UltraTech Cement Ltd., assigning ratings for its proposed non-convertible debentures while reaffirming ratings on existing bank facilities. The ratings reflect the company's dominant position and operational resilience within the Indian cement industry.The assignment includes a rating of 'CARE AAA; Stable' to the proposed issue of the non-convertible debentures (NCD) totaling ₹5,000.00 crore. Furthermore, CARE Ratings reaffirmed its ratings for bank facilities, noting sustained performance in the company’s capital structure and debt coverage.
Key financial and rating details provided by CARE Ratings Limited are summarized below:
| Facilities/Instruments | Amount (₹ crore) | Rating | Action |
|---|---|---|---|
| Long-term / Short-term bank facilities | 14,700.00 | CARE AAA; Stable / CARE A1+ | Reaffirmed |
| Long-term bank facilities | 2,400.00 | CARE AAA; Stable | Reaffirmed |
| Non-convertible debentures | 5,000.00 | CARE AAA; Stable | Assigned |
Operational Scale and Growth Trajectory
CARE Ratings attributes UltraTech's strong credit profile to its market leadership and vast manufacturing footprint across India. The company holds the largest installed cement capacity in India at 200.1 million tonnes per annum (MTPA) as of April 2026. When factoring in its overseas operations, which include a grey cement capacity of 5.4 MTPA in the United Arab Emirates (UAE), UltraTech’s overall global grey cement capacity stands at 205.5 MTPA.The company is committed to significant expansion, planning to add approximately 37 MTPA of cement capacity. This expansion is projected to elevate the total installed capacity to over 242.5 MTPA by the end of FY28, following a decade of sustained capital deployment and capability growth.
Focus on Efficiency and Green Power Initiatives
UltraTech Cement Ltd. is actively focusing on improving energy efficiency and mitigating fuel cost volatility through green power adoption. The company plans to increase its green power generation capacity to roughly 85% of its estimated requirements by FY30-end. Furthermore, initiatives are underway to upgrade the Waste Heat Recovery System (WHRS) capacity from 414 megawatt (MW) as of March 31, 2026, to 435 MW by FY27-end. Renewable power capacity is also targeted for increase from 1.39 gigawatt (GW) to 2 GW by FY27-end.These operational efficiencies have translated into improved cost moderation. Fuel costs moderated significantly in FY26 to ₹1,270 per tonne, a result of increased green power mix, which contributed to the improvement of net debt to PBILDT (adjusted), which stood at 1.38x as of March 31, 2026, having improved from 1.89x in FY25.
Financial Resilience and Risks
The company’s robust financial structure is highlighted by a net worth improvement to approximately ₹62,917 crore as of March 31, 2026, up from ₹56,180 crore the previous year, reflecting healthy internal accruals. The capital structure remains sound, with overall gearing improving to 0.45x in FY26 from 0.50x in FY25.Despite these financial strengths and superior liquidity—supported by a generated gross cash accrual of ₹13,258 crore in FY26—Care Ratings acknowledges the inherent risks in the cement sector. These include industry cyclicality and exposure to volatility in input costs and realizations, particularly citing potential impact from geopolitical tensions on pet coke prices. The company mitigates this risk through maintaining raw material inventory sufficient for three to four months of operations.
CARE Ratings maintained a 'Stable' outlook, indicating confidence in UltraTech’s continued market leadership supported by incremental capacity additions and healthy operating profitability margins.
ULTRACEMCO Stock Price Movement
As of 3:25 PM, shares of UltraTech Cement Limited are slipping by 0.33% in live trading, currently priced at ₹11,869. The equity has seen considerable activity today, with 212,481 shares traded as the company trades within its intraday range.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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