UltraTech Shares Dip As Margin Pressures Offset Strong Revenue Growth

The cement maker's shares fell after Q4 results, showing strong volume-driven revenue growth but rising input costs and weaker prices.

Shares of UltraTech Cement fell nearly 2% on Tuesday as elevated input costs and softer cement prices weighed on profitability despite strong quarterly revenue growth.

The company reported a consolidated net profit of ₹2,475 crore for the quarter ended March 31, up 9.6% from ₹2,258 crore a year earlier. 

Revenue from operations rose 12.95% year-on-year (YoY)to ₹23,063 crore, supported by a 17% increase in cement volumes.

However, total expenses climbed 15.3% YoY to ₹20,044 crore, driven by higher power and fuel costs at ₹5,224 crore and freight expenses of ₹5,176 crore.

UltraTech's consolidated EBITDA for the quarter stood at ₹4,620 crore, with blended EBITDA per tonne at ₹1,126, broadly in line with estimates, according to JM Financial. 

The brokerage noted that year-on-year comparisons are not directly comparable due to the recent acquisitions of India Cements and Kesoram Industries.

SEBI-registered analyst A and Y Market Research said on Stocktwits that "while volume growth was strong, cost inflation and pricing pressure led to a miss on the bottom line. The company's focus on long-term capacity expansion remains intact."

UltraTech added nearly 43 million tonnes of grey cement capacity during FY25, mainly through acquisitions, taking its domestic capacity to 183 million tonnes. 

The company plans to add another 27 million tonnes over the next two years, which JM Financial said could help it raise its market share by 450 basis points to 27% by FY27.

The brokerage added that UltraTech has already achieved cost savings of ₹86 per tonne in FY25 and expects structural improvements of up to ₹300 per tonne in the coming years, boosting its profitability. 

JM Financial maintained UltraTech as its top pick in the sector and raised its price target to ₹13,500, citing potential improvements in asset turnover and return ratios.

On Stocktwits, sentiment for UltraTech stayed 'neutral' amid 'extremely high' message volume.

UltraTech Cement shares have gained 4.1% in 2025, outperforming the Nifty's 0.09% rise and the Sensex's 0.15% climb.

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