“First and foremost, it’s very important for us to clean up the India Cements’ operations, bring it up to speed, which is a turnaround of the company, align people, processes, product, and then we will take a call on whether to merge or not to merge,” Daga said on Monday.
India Cements became a subsidiary of UltraTech in late December last year.
“We are fully cognisant of a huge amount of stamp duty that would be involved. Why spend money on that? But if it’s worthwhile, perhaps in (20)27 or 28, actually, we will revisit the decision,” Daga told analysts on a call after the company’s quarterly earnings.
India Cements achieved a breakeven in terms of earnings before interest, tax, depreciation and amortisation (Ebitda) by March. In April, UltraTech’s management said the subsidiary’s Ebitda per tonne would hit Rs 500 in the current fiscal 2026, Rs 800 in fiscal 2027 and Rs 1,000 in the following fiscal year. It made Rs 400 per tonne of Ebitda in the quarter ended June 30, after taking into account the limestone royalty of Rs 160 per tonne in Tamil Nadu.
At a consolidated level, India Cements made a loss of Rs 132.90 crore for the June quarter compared with a profit of Rs 58.47 crore a year earlier, weighed by an exceptional loss of Rs 123.77 crore due largely to impairment charges. Refinancing of debt helped cut down finance costs to Rs 26.58 crore from Rs 82.36 crore a year earlier.Given that cement prices have been favourable, India Cements could achieve Ebitda per tonne of Rs 1,000 before fiscal 2028, Daga said. “Prices holding up obviously could help us achieve our targets earlier. Besides prices, most important is the integration effort. It is people, processes, products, quality, logistics. Everything is getting integrated, which helps us realise our goals,” he said.While there are opportunities for brownfield expansion at India Cements, it will be announced at a later stage, he said.
First-quarter performance
UltraTech posted a consolidated net profit of Rs 2,226 crore in the first quarter, up 49% on year and in line with market estimates.
Its numbers for the quarter include those of Kesoram Industries and India Cements, both of which were not a part of the company a year earlier. While India Cements is independently listed and announced its quarterly earnings last week, the numbers for Kesoram were not separately available.
Consolidated sales increased 13% on year to Rs 21,040 crore, while sales volume rose 9.7% to 36.83 million tonnes.
Profit before interest, depreciation and tax was Rs 4,591 crore, up 44% from a year earlier. Ebitda per tonne rose to Rs 1,198 from 899.
At a standalone level, UltraTech made a profit of Rs 2,232 crore on sales of Rs 19,398 crore. Ebitda stood at Rs 4,356 crore.
