UltraTech lines up ₹1,500 cr capex for India Cements’ turnaround, eyes FY27 payoff

The UltraTech management has set clear performance targets for India Cements — aiming for an EBITDA per metric ton of ₹500 in the current fiscal, rising to ₹800 by FY27, and crossing the four-digit mark thereafter
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AMIT DAVE

UltraTech Cement Ltd, following its acquisition of India Cements in December 2024, has outlined a strategic transformation plan with a proposed capital expenditure of ₹1,500 crore over the next two years for India Cements. This investment is aimed at operational upgrades and long-term profitability improvement.

Under UltraTech’s fold, India Cements has achieved EBITDA breakeven in the first quarter post-takeover and it achieved over 1 million tons in volumes this March — a milestone never reached in its history, UltraTech shared as part of its Q4 FY25 earnings call. With price improvements seen in southern markets from April, the outlook for continued growth and margin expansion appears promising, it added.

Source: UltraTech Investor Presentation

Of the total planned outlay, ₹1,000 crore is earmarked for waste heat recovery systems (WHRS) and other margin-enhancing initiatives, with a projected payback period of under three years. These initiatives will be implemented through FY26 and FY27, with benefits expected to begin materializing in the January–March quarter of FY27.

Alongside the ₹1,500 crore capex plan, UltraTech is exploring future brownfield expansion opportunities within the India Cements network.

Improvement programmes, rebranding

An extensive efficiency improvement programme is also underway to boost operational metrics across India Cements’ facilities. While renewable energy components of the plan will come online earlier, WHRS and cooler upgrades will reach completion by the final quarter of FY27, marking a key milestone in the turnaround. This will be supported by improved capacity utilisation, operational efficiencies, logistics optimisation, and overhead reduction, with all key elements of the P&L under strategic review.

In terms of branding, a phased rebranding of India Cements under the UltraTech umbrella is expected by the end of FY27. Initially, a hybrid strategy will be employed, leveraging India Cements’ strong brand equity through tolling arrangements and a gradual transition. “Given that India Cements already has several established brands, the rebranding will follow a mix-and-match strategy, with a phased approach planned over time,” said the management.

Notably, the rebranding and upgradation roadmap is being executed in parallel with similar programmes at Kesoram, another of UltraTech’s recent acquisitions. “The improvement programmes across these two entities, covering a combined capacity of 25 million tons, will proceed concurrently and independently, without impacting UltraTech’s ongoing efficiency enhancement plans.