Motilal Oswal Research Report: UltraTech Cement

Key Highlights

UltraTech Cement (UTCEM) has outpaced industry growth through organic expansion and strategic acquisitions, increasing its market share from 16% in FY14-15 to 28% in FY25 and 29% in 9MFY26.

Capacity Addition Plan

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The company is executing a multi-phase capacity addition plan to raise domestic grey cement capacity to 235.4mtpa by FY28, up from the current 191.4mtpa. During FY23-25, UTCEM contributed 38% of the industry's capacity additions, and it is expected to add 28% of incremental industry capacity during FY26-28.

Integration and Cost Optimization

The integration of acquired assets (Kesoram and ICEM) is progressing well, with meaningful brand transition and operational restructuring underway. Cost-optimization initiatives are expected to deliver cumulative savings of INR300-350/t over the medium term, with INR86/t achieved in FY25 and a target of INR100/t in FY26E.

Outlook

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We estimate a consolidated revenue/EBITDA/PAT CAGR of 12%/18%/22% over FY26-28, driven by 10% volume CAGR and 2pp OPM expansion to 21% by FY28. Profitability improvement and disciplined capex should lift the RoE/RoCE to 14%/13% by FY28.

Valuation

We value UTCEM at 19x FY28E EV/EBITDA to arrive at our target price of INR15,000. We reiterate a BUY recommendation.