UltraTech Cement to Raise ₹3,000 Crore Through NCDs Amid Growing Competition

UltraTech Cement reported financial results for Q2 FY2025, with a 36 percent drop in net profit to ₹825 crore, which fell short of analyst expectations. The company’s revenue for the quarter also declined by 2 percent on a year-on-year (YoY) basis, reaching ₹15,635 crore. Its EBITDA margin contracted sharply by 300 basis points YoY to 12.9 percent.

Despite these financial setbacks, UltraTech saw a 3 percent increase in domestic sales volume compared to the previous year. This growth was driven by strong demand, especially in the wake of reduced energy costs, which fell by 14 percent YoY. However, rising raw material costs continued to pressure the company’s margins.

In addition to its financial performance, UltraTech’s consolidated net debt saw a significant rise to ₹8,793 crore in September 2024, up from ₹2,779 crore in March 2024. This increase in debt highlights the company’s ongoing investment in expanding its operations, including acquisitions and strategic stakes in other companies.

One of the key strategies UltraTech Cement has employed to strengthen its position in the market is strategic investments. In June 2024, the company made a significant investment of ₹3,954 crore for a 32.7 percent equity stake in India Cements. This acquisition aims to enhance UltraTech’s presence in South India, a region where the company faces intense competition from the Adani Group. In fact, the cement market in South India has become a battleground between UltraTech and Adani, both of which are aggressively pursuing market share.

As of March 2024, UltraTech Cement held an 11 percent market share in South India, while Adani held just 6 percent, according to industry estimates. This strategic investment in India Cements is seen as a move to defend and strengthen UltraTech’s leadership position in the region. The company’s earlier deals with Kesoram Industries further emphasize its commitment to expanding its reach and influence in the Indian cement market.

UltraTech Cement is also focusing on sustainability as part of its long-term growth strategy. The company recently raised $500 million through a sustainability-linked loan. This marks its second such financing initiative, following a similar bond issuance in 2021. The funds raised through sustainability-linked financing are meant to support the company’s environmentally friendly projects and initiatives.

Looking ahead, UltraTech is optimistic about the future of the cement industry in India. The company has projected a sustainable volume growth rate of 7–8 percent, driven by increased government spending on infrastructure projects and growing demand in the urban housing sector.

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