UltraTech Cement stock faces fuel pressure despite volume growth
Published on 11/06/2026 at 02:30 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSKey takeaways for investors
- UltraTech Cement delivered strong second-quarter volume and revenue growth, but rising fuel costs weakened profitability per tonne.
- ICICI Securities retained a Hold rating and lowered its target after reducing its earnings assumptions.
- Capacity expansion, infrastructure demand and the new Ultravolt business remain important factors for the medium-term outlook.
UltraTech Cement delivered strong operating growth in the second quarter ended September 30, 2026, but higher fuel costs kept pressure on profitability. The findings come from a research update by DSIJ, which summarized the assessment by ICICI Securities.
Volume growth meets cost pressure
Consolidated sales volume rose 12.9 percent year over year to 38.2 million tonnes. Domestic sales increased 13.8 percent, while net sales advanced 18.8 percent to INR 232.95 billion. Blended realization also improved, supporting revenue growth.
The cost trend was less favorable. EBITDA per tonne fell 19.8 percent sequentially as variable costs increased with higher fuel prices and fixed costs rose because of weaker operating leverage. Power and fuel costs reached INR 1,442 per tonne in the quarter, according to the DSIJ summary.
Broker lowers target price
ICICI Securities retained a Hold recommendation and reduced its target price to INR 11,000 from INR 12,138. The broker also lowered its FY27 and FY28 EBITDA forecasts by around 3 percent each and applied a lower valuation multiple to its FY28 estimate.
Management expects stronger demand in the second half of fiscal 2027, supported by data centers, semiconductor projects, private-sector capital expenditure, housing and transport infrastructure. It also expects cement price increases to help offset cost pressure, although elevated fuel prices, new industry capacity and intense competition remain key risks.
Expansion remains central
UltraTech Cement commissioned 4.6 million tonnes per year of grinding capacity in September 2026. The company retained its plan to reach domestic capacity of 240 million tonnes per year and continued investments in renewable power, waste heat recovery and the Ultravolt wires and cables business.
UltraTech Cement at a glance
- Company: UltraTech Cement Limited
- ISIN: INE481G01011
- National Stock Exchange: ULTRACEMCO
- Bombay Stock Exchange: 532538
- Sector: Construction materials
- Registered office: Mumbai, India
India's broader equity market remains a relevant backdrop in the Current market reports.
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