India’s cement industry plans to invest around Rs. 1.25 trillion in capital expenditure (capex) over the next two financial years, especially in FY25 and FY26. This investment plan is to add 130 MT of capacity which is driven by demand and increased market share.
Despite this spending, the credit on the books of manufacturers is expected to remain stable due to low capex intensity and strong balance sheets. More than 80% of the funding comes from operating cash flows. The anticipated growth in demand supports a better outlook for the sector which is projecting at a 7% annual growth rate through FY29.
1. Ultratech Cement
UltraTech Cement Limited which is headquartered in Mumbai is one of India’s largest manufacturers of ready-mix concrete, grey cement, and white cement. They have a capacity of more than 152 MTPA. They rank among the top five cement producers in the world. Ultratech Cements operates in numerous facilities spread across India and internationally while improving its market presence.
In Q2 FY25 Ultratech Cement Ltd reported a 2.35 percent year-over-year increase in revenue from operations to Rs.15,635 crore and a 35.5 percent decrease in net profit to Rs.825 crore, in the same period.
As of March 2024, the company’s cement capacity stood at 140.8 MTPA. By October they had total commissioned 8.8 MTPA and acquired 1.1 MTPA of capacity. By FY25, they plan to touch 157 MTPA of capacity. By FY27, they plan to increase their capacity to 183.5 MTPA.
This excludes Kesoram’s capacity of 10.75 MTPA. India Cements of 14.45 MTPA are awaited for regulatory approval. For FY25, the planned capex spending was around Rs. 9,500 crore, and over the next three years, it was around Rs. 32,400 crore.
2. Shree Cement
Shree Cement Limited was established in 1979. It is headquartered in Kolkata which is one of the leading cement manufacturers in India. With a production capacity of around 46.4 MTPA, they operate across six states in the country. The company offers brands that include Bangur Cement, Shree Ultra Jung Rodhak, and Rockstrong Cement.
In Q2 FY25 Shree Cement Ltd reported a 1.74 percent year-over-year increase in revenue from operations to Rs.5,124 crore and a 51 percent decrease in net profit to Rs.278 crore, in the same period.
According to Crisil ratings, The company is expected to spend around 13,000 crore as capex in fiscal FY25 to FY27. Recently, Shree Cement has invested around Rs. 4,000 crore in Renewable Energy and an additional capex of Rs. 1,000 crore is planned for the additional installation of renewable energy capacity in FY25 which includes 132 MW solar capacity.
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3. Ambuja Cement & ACC (Adani Cement)
Ambuja Cements Limited comes under the umbrella of Adani Group. It is one of the prominent Indian cement manufacturers known for its innovative products and practices. This company was established in 1986 and it operates in multiple integrated plants and grinding units across India by producing a range of cement types.
ACC Limited is a leading cement and ready-mix concrete manufacturer in India. It was established in 1936, the company operates 18 cement plants and over 82 ready-mix concrete units nationwide.
In Q2 FY25 Ambuja Cement Ltd reported a 1.23 percent year-over-year increase in revenue from operations to Rs.7,516 crore and a 52 percent decrease in net profit to Rs.473 crore, in the same period.
In Q2 FY25 ACC Ltd reported a 4 percent year-over-year increase in revenue from operations to Rs.4,614 crore and a 48.45 percent decrease in net profit to Rs.200 crore, in the same period.
With Orient Cements, the current capacity as of October stood at 97 MTPA. For FY25, they plan to reach 104 MTPA, then a further to 118 MTPA by FY26. The company plans to achieve a capacity of around 140 MTPA by 2028. Ambuja Cements has planned around Rs. 1,000 crore worth of capex to build a regional house in Delhi and a cement house in Ahmedabad.
Written by Santhosh
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