CARE Ratings Limited has reaffirmed 'CARE AAA; Stable / CARE A1+' rating to the Long Term / Short Term Bank facilities of UltraTech Cement Limited and assigned 'CARE AAA; Stable' rating to the fixed deposit programme.
CARE Ratings Limited (CARE Ratings) has reaffirmed the ratings to the bank loan facilities of UltraTech Cement Limited (UltraTech) and assigned long term ratings to the fixed deposits. The ratings continue to reflect its sustained market leadership position in India, supported by its large and well-diversified cement capacities across all regions in India. UltraTech has the largest installed cement capacity in India, 177.7 million tonne per annum (MTPA) as on March 1, 2025, and including overseas cement capacity, its overall grey cement capacity is 183.1 MTPA. Under the ongoing capacity expansion plan, the company's installed capacities are expected to rise to 188.2 MTPA by FY25-end and 214.7 MTPA by FY27-end, which is likely to further aid its market position in the medium term. Existing capacities reflect the cement capacities from both The India Cements Limited (ICL, rated CARE AAA; Stable/CARE A1+) and KIL.
The company is undertaking second and third phase of capacity expansion which along with current inorganic acquisitions are expected to scale up the installed capacity to 209.3 MTPA in India and 214.7 MTPA globally by FY27-end. Apart from additional grey cement capacity, the company is expanding its green power generation capacity to around 60% of its expected power requirements by FY27-end. Phase-III capex programme also includes installation of additional waste heat recovery system (WHRS) of 39 MW across plants. Furthermore, the company has announced its foray in cables and wire division with capital investment of Rs.1800 over the next two fiscal years. Current expectation of execution of cable & wire project is December 2026 with revenue largely being generated from FY28 onwards.
Ratings also draw comfort from UltraTech's sound operating efficiencies supported by highly integrated operations with adequate limestone reserves in its captive mines, a captive coal block, and a strong distribution network consisting of 30,000+ dealers, 89,000+ retailers and 4400+ UltraTech Building Solutions (UBS) outlets. The company has highly integrated operations, with captive thermal power plants (TPP) of 1,120 MW, WHRS of 324 MW and renewable energy capacity (solar and wind energy) of 752 MW as well as captive limestone reserves. The presence of split grinding units (GUs) and bulk terminals have improved efficiencies to cater to different markets in India.
Ratings also factor UltraTech's robust financial profile, which is characterised by its healthy capital structure and strong debt coverage indicators. Its financial profile is aided by its enhanced regional market share and ramp-up of the acquired assets in the past. Accretion to reserves over the years have kept the company's net worth strong. Recent spate of capex, inorganic acquisitions and incremental working capital requirements led to increase in debt recently. However, despite this, the company's financial risk profile remains robust with Net Debt (Including LC acceptances and SD) to PBILDT is estimated to remain around 1.6x by FY25 ending and gradually strengthen thereafter with incremental operational efficiencies of acquired assets and limited incremental debt. The liquidity of the company is also superior with significant generation of cashflow from operations, moderate working capital limit utilization and healthy cash & cash equivalents plus liquid investments.
CARE however notes that despite these strengths, the company will remain exposed to cyclicality in the cement industry and volatility in input costs and realizations.
Shares of UltraTech Cement Limited was last trading in BSE at Rs. 10579.75 as compared to the previous close of Rs. 10488.95. The total number of shares traded during the day was 6146 in over 2155 trades.
The stock hit an intraday high of Rs. 10608.70 and intraday low of 10401.05. The net turnover during the day was Rs. 64982846.00. |
