UltraTech Cement Bolsters Production Capacity with Successful Brownfield Expansions:

On March 27, Ultratech Cement will be under focus after announcing the successful commissioning of several brownfield expansions across the country which has further strengthened its production capacity.

In the last month, the share price of the cement company increased by 14%, which is higher than the Nifty 50 index which moved up by 6% in the same time frame.

UltraTech Cement has started commercial operations at the company’s Maihar facility located in Madhya Pradesh at a clinker capacity of 3.35 million tonnes per annum (mtpa), and has also completed one of the two planned cement mills (2.7 mtpa). The second grinding mill is expected to be operational by Q1 FY26.

“UltraTech Cement has announced in a regulatory filling that we have successfully commissioned brownfield clinker capacity of 3.35mtpa and one of the two cement mills of 2.7 mtpa at our Maihar unit in Madhya Pradesh. The second grinding mill is expected to come on stream in Q1 FY26.”

UltraTech has already completed the brownfield expansion of its grinding units located at Dhule, Maharashtra (1.2 mtpa) and Durgapur, West Bengal (0.6 mtpa). Additionally, the company has also opened its first bulk terminal located in Lucknow, Uttar Pradesh, which has an operating capacity of 1.8 mtpa.

With these expansions, UltraTech has increased its domestic grey cement production capacity to 183.36 mtpa, while the total capacity inclusive of the international operations stands at 188.76 mtpa.

The other day UBS reviewed its estimates for UltraTech Cement, increasing the rating and setting the price target at Rs 13,000. The upgrade, together with a positive outlook on some other selected cement stocks, was attributed to UltraTech’s strong execution capabilities even under harsh market conditions, together with industry leading growth and profitability.

The research firm analysts mentioned that they hold a negative view on the cement sector since July, 2023 because of a dip in demand and an increase in price competition after Adani Group joined the market. With those risks now mostly discounted, analysts now expect an earnings upcycle in FY26.

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