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UltraTech Cement anticipates a 7-8% growth in domestic cement demand in FY25, driven by construction activities. The industry plans to add 35-40 million tonnes of capacity, mainly in eastern and southern regions, with UltraTech leading the expansion.
UltraTech Cement’s share remains in focus as the company announced that it predicts a 7-8% increase in cement demand for the current financial year, driven by a surge in construction activities across India. The company’s latest annual report highlights significant growth prospects and expansion plans to meet this rising demand.
The Indian cement industry is poised to add 35-40 million tonnes of capacity in the next fiscal year, with 60-65% of this new capacity concentrated in the eastern and southern regions. This expansion aims to cater to the growing demand from the infrastructure and housing sectors, which are seeing increased investment and development activities.
As a result of the anticipated demand surge, the capacity utilisation rate of the cement industry is expected to rise to 72% in FY25, up from around 68% in FY23. This improvement in utilisation reflects the industry's response to the robust growth in construction activities nationwide.
The growth in cement demand is bolstered by the government’s focused approach on integrated and coordinated planning of infrastructure projects under the PM Gati Shakti initiative. The prioritisation of expenditure on vital sectors and the effective management of cash resources have further stimulated infrastructure development.
UltraTech Cement is aggressively expanding its capacity to leverage these growth opportunities. The company’s recent acquisition of a majority stake in India Cements Ltd (ICL) and an over ₹3,000 crore open offer to acquire 26% shares of ICL underscores its commitment to scaling operations.
In FY24, UltraTech recorded net sales of ₹69,810 crore and achieved a historic milestone of 150 million tonnes per annum (MTPA) capacity. Birla highlighted the company's journey from its first 1 MTPA cement unit in the early 1980s to become the world's third-largest cement company outside of China.
On Friday, the share price closed at ₹11,720, down ₹264.50 (2.21%). Despite a recent dip, UltraTech Cement’s share price has shown strong performance, giving a 12% return in 2024 and a 43.36% return over the past 12 months.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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