UltraTech Cement reported strong earnings growth for the September quarter, with net profit rising more than 21% year-on-year and revenue increasing nearly 19%. However, higher raw material, power and fuel expenses weighed on the company’s performance, while its profit fell short of market expectations. The results highlight the strength of cement demand in India, even as manufacturers face pressure to control costs.
The Aditya Birla Group company reported consolidated net profit attributable to the owners of the parent at ₹1,493.8 crore for the second quarter of the 2026-27 financial year, compared with ₹1,231.6 crore in the corresponding period last year. Revenue from operations rose 18.8% to ₹23,295.1 crore from ₹19,606.9 crore a year earlier.
The company’s consolidated profit after tax, including the relevant share of non-controlling interests, stood at ₹1,501 crore, against ₹1,238 crore in the year-ago quarter. Consolidated net sales increased 18.9% to ₹23,024 crore.
Despite the double-digit growth, UltraTech Cement shares came under pressure after the results were announced on October 19. Investors were concerned that the profit figure had missed analyst estimates. The company’s shares fell during the session, reflecting worries about rising operating expenses and their impact on future margins.
Cement sales volumes provide support
Higher sales volumes played a major role in UltraTech Cement’s quarterly performance. Domestic grey cement sales volumes rose 13.8% year-on-year to 35.94 million tonnes, compared with 31.58 million tonnes in the same quarter last year.
The increase points to stronger demand across the company’s markets, supported by infrastructure spending, construction activity and housing requirements. Cement consumption often benefits from road building, urban development and government-backed infrastructure projects, although demand can vary across regions and seasons.
Capacity utilisation also improved to 71% from 66% a year earlier. Better utilisation allows manufacturers to spread fixed costs across higher production volumes, potentially supporting profitability.
UltraTech said its performance remained resilient despite a monsoon-affected quarter and continuing geopolitical tensions in West Asia. The company attributed its growth to execution, a wider market presence, cost optimisation and a greater focus on premium cement products.
Rising expenses remain a concern
The increase in expenses remains an important factor for investors tracking UltraTech Cement’s earnings. Total expenses rose 17.8% year-on-year to ₹21,338.9 crore during the quarter, compared with ₹18,119.6 crore in the corresponding period last year.
Power and fuel expenses increased 24% to ₹5,511.1 crore. The cost of materials consumed climbed 24.4% to ₹4,208.2 crore, while freight and forwarding expenses rose 16.5% to ₹4,809.7 crore.
Higher energy prices, transportation costs and raw material expenses can reduce the benefits of rising cement sales. Companies generally try to manage these pressures through operational efficiencies, improved product mix and price increases. However, their ability to pass on additional costs depends on demand and competition.
UltraTech’s profit before interest, depreciation and tax increased 17.3% to ₹3,832 crore. Its operating margin on this measure narrowed to 16.6% from 16.9% a year earlier, showing that costs continued to absorb part of the revenue growth.
The company’s operating performance therefore presents a mixed picture: stronger sales and improved production utilisation supported earnings, but expenses continued to limit the improvement in margins.
Capacity expansion and new business plans
UltraTech is continuing to expand its manufacturing capacity to meet expected demand growth. During the September quarter, it commissioned 3.6 million tonnes per annum of new integrated cement capacity at Petnikota in Andhra Pradesh. It also added one million tonnes per annum through debottlenecking at existing plants in Visakhapatnam, Patratu and Nathdwara.
As of September 30, its domestic grey cement capacity stood at 204.7 million tonnes per annum. Including overseas capacity of 5.4 million tonnes, its global capacity reached 210.1 million tonnes per annum.
The company remains on track to increase its capacity to more than 240 million tonnes per annum by March 2028. The expansion is intended to strengthen its position in India’s cement market and prepare it for future demand.
UltraTech has also moved beyond its traditional cement business with the launch of UltraVolt, its wires and cables brand. The company commissioned a manufacturing facility at Jhagadia in Gujarat as part of its entry into the building products segment. The move gives it an opportunity to serve customers involved in housing and construction through a wider range of products.
Green energy gains importance
The company continued to invest in renewable energy and waste heat recovery during the quarter. It added 117 megawatts of renewable energy capacity and 10 megawatts of waste heat recovery capacity.
Its installed waste heat recovery capacity reached 444 megawatts, while renewable power capacity stood at 1,580 megawatts. Green power accounted for 48% of its total power mix during the quarter.
These investments are significant for cement manufacturers because production requires substantial energy. Greater use of renewable power and recovered heat can help improve energy efficiency and reduce exposure to conventional fuel costs over time.
Looking ahead, UltraTech Cement’s performance will depend on whether sales volumes remain strong, cement prices improve and input costs become more manageable. The company’s capacity expansion provides room for growth, but investors will continue to watch profit margins closely.
The September-quarter results underline the opportunities in India’s construction and infrastructure market. However, sustained earnings growth will require UltraTech to balance higher production and sales with tighter cost control. Its ability to manage this balance will be crucial as it expands capacity and develops new building products businesses.