29 July 2025, UltraTech Cement, the Aditya Birla Group’s flagship cement arm, has earmarked a capital expenditure of INR 10,000 crore (USD 1,151.1 million) for FY26 to drive capacity expansion and energy efficiency improvements. This strategic allocation follows its recent acquisitions and organic growth plans, positioning the company to surpass 200 million tonnes per annum (MTPA) capacity in the near term.

According to its FY25 annual report, UltraTech is optimistic about a 6–7% cement demand rebound in FY26, supported by robust infrastructure investments and housing development. The company, which reported revenues exceeding INR 75,000 crore (USD 8,633.5 million) in FY25, has significantly strengthened its pan-India presence with the acquisitions of India Cements and Kesoram Industries’ cement business, collectively adding 26.3 MTPA of grey cement capacity.

Accelerated Organic and Inorganic Expansion

UltraTech plans an additional 28.8 MTPA in organic capacity by FY27. In FY25 alone, it added 42.6 MTPA of consolidated grey cement capacity 16.3 MTPA through organic means and the rest via acquisitions. The company’s total capacity as of June 30, 2025, stands at 192.26 MTPA.

Managing Director K.C. Jhanwar noted that UltraTech’s capacity additions accounted for 55% of India’s total cement sector expansion in FY25, reinforcing its leadership position. He emphasized that while the net debt to EBITDA ratio rose to 1.33x in March 2025, a healthier EBITDA outlook and higher volumes are expected to bring this down rapidly.

Demand Outlook Remains Robust

India's cement demand reached approximately 435 million tonnes in FY25. Though growth slowed to 4–5% due to subdued infrastructure spending and extended monsoons, the industry is poised for a stronger 6–7% rebound in FY26. The government's INR 11.21 lakh crore (USD 134.82 billion) infrastructure outlay in the Union Budget will act as a key demand catalyst.

South India Strategy and Green Energy Push

The strategic acquisitions in South India are pivotal for UltraTech. “India Cements and Kesoram have significantly enhanced our footprint in the South,” Jhanwar stated. Post-acquisition, UltraTech is implementing operational upgrades and energy enhancements. At former Kesoram units, 107 MW of green energy capacity is being added to improve efficiencies.

India Cements, which reached EBITDA break-even in Q4 FY25, is set to undergo a comprehensive capex program over the next two years to align with UltraTech’s operational benchmarks.

Competitive Landscape: Adani Group Gains Ground

UltraTech faces increasing competition from Adani Group’s Ambuja Cements, which has aggressively expanded via acquisitions. Having surpassed 100 MTPA capacity in FY25, Ambuja aims to hit 118 MTPA by FY26 and 140 MTPA by FY28, with growth fueled by acquisitions like Penna Cement, Sanghi Industries, and Orient Cement.