Tag Cement Industry

Grasim Industries
Grasim Industries Q3 Results: Net Profit Dips 41% to ₹899 Cr, Revenue Grows 9% to ₹34,793 Crore

Grasim Industries Ltd: Overview

Grasim Industries, a major company of Aditya Birla Group, is one of the major diverse groups of India with the presence in many fields including cement, textiles, chemicals and financial services. Established in 1947 and headquarters in Mumbai, Grasim developed into a prominent player in the Indian Industrial Scheme, which has contributed significantly to the country’s infrastructure, manufacturing and consumer sectors. The company works in industries that are important for India’s economic growth, such as cement (through UltraTech cement), Viscose Staple Fiber (VSF), caustic soda and textiles. It is also expanding in new-age businesses such as paint, B2B e-commerce, and advanced material solutions, reflecting its commitment to diversification and innovation. The Indian industrial sector is ready for growth, inspired by an increase in urbanization, investment of growing infrastructure and favorable government policies. The chemical region, where Grasim has a strong leg, is looking after increasing demand due to increase in industries of manufacturing and consumer goods. Similarly, the government continues to benefit from the push for infrastructure including highways, housing and smart cities in the cement sector. With a strong balance sheet and strategic investment in high-development areas, Grasim is well deployed to redeem the emerging opportunities. 

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The B2B e-commerce segment of Grasim Industries is increasing in various categories, geography and healthy revenue growth in new customers. The USD is on a trade track to achieve an ambitious revenue target of $ 1 billion by FY 27. The cement division has been reached 171.2 MTPA, including Indian and foreign operations; Ultra-tech cement, recently 14.45 MTPA from India Cements Limited. In the Paints segment, Grasim began commercial production in its Chamrajnagar feature in Nov. 2024, in which Mahad plant will be expected to start operations in Q4 FY25. Clothing Business Revenue D-3% YoY to ₹ 558 Cr. The first phase with a capacity of 55k TPA will require an investment of ₹ 1,350 crore in the next two years. Akshay trade cumulative established capacity increased to 1.2 GW, out of which 37% are with group companies in the cement sector, domestic gray cement reality has declined 9.6% YOY, but 1.4% QOQ improvement has been shown, which has shown which has been shown Who is mount per copy. It has reached ₹ 4,970. As of 31 December, 2024, the company’s total capital expenditure was 9,015 crore, which represented about 90% of the total planned project cost. 

Business Segments 

  • Cement: Grasim near UltraTech Cement, India’s largest cement manufacturer, one of the top global producers. Ultratech has a total capacity of over 132 MTPAs, which have deals in infrastructure and real estate projects across India and abroad. The company operates over 20 integrated cement plants, 26 grinding units and 7 bulk terminals, which ensure a wide distribution network and strong market appearance.  
      
  • Viscose Staple Fiber and Textiles: Grasim is the largest producer in India, a major raw material in the textile industry. The company’s VSF division supplies environmentally friendly, biodegradable fiber to global textile manufacturers, catering for increasing demand for sustainable fashion. Its Leva brand has obtained significant traction between major dresses brands, which offers better comfort and liquidity.  
     
  • Chemical: Grasim is a prominent player in the chemical field of India, which uses special chemicals used in industries such as caustic soda, chlorine derivatives and industries such as textiles, paper, aluminium and pharmaceuticals. The company has a strong market share in the caustic soda segment, with more than 1.3 million TPA production capacity.  
      
  • Paints: Grasim has entered the paints industry with his brand “Birla Opus”, which marks his forest in the competitive Indian decorative paints market. , With an investment of over 10,000 crores, Grasim is setting up several paint manufacturing plants across India, which aims to disrupt the industry with new products and a customer-focused approach. 

Subsidiary Information 

  • UltraTech Cement Limited: UltraTech Cement is the most important subsidiary of Grasim and India’s largest cement manufacturer is with a global appearance in UAE, Bahrain and Sri Lanka. Ultratech continues to lead the permanent construction solution and capacity extension, which ensures long -term market leadership. 
  • Aditya Birla Capital Limited: Aditya Birla Capital Limited (ABCL) is the Financial Services Branch of Grasim, which provides a comprehensive category of financial products including asset management, insurance, loan and money management. With a strong digital appearance and over 30 million customer bases, the ABCL is a major development driver for the group. 
  • Aditya Birla Renewables Limited: Grasim has invested in Aditya Birla Renewables Limited, which focuses on clean energy solutions including solar and wind energy. The company is expanding its renewable energy capacity to support Grasim’s manufacturing units and contribute to India’s clean energy goals.
  • Aditya Birla Chemicals: Grasim’s subsidiary, Aditya Birla is a leader in the special chemistry market, producing chlorine-alkali products, epoxy resins, and advanced materials. The company serves industries such as construction, motor vehicles, and pharmaceuticals, with focus on innovation and stability.   
  • Aditya Birla Clothes: Grasim’s textile division produces high-quality fibers and yarn products used in domestic and global markets through Aditya Birla textiles. With the commitment of permanent production, the company plays an important role in the textile sector led by Grasim. 

Q3 FY25 Earnings 

  • Revenue of ₹ 34,793 crore in Q3 FY25 up by 8.9% YoY from ₹ 31,965 crore in Q3 FY24. 
  • EBITDA of ₹ 6,796 crore in this quarter at a margin of 20% compared to 22% in Q3 FY24. 
  • Profit of ₹ 1,844 crore in this quarter compared to a ₹ 2,603 crore profit in Q3 FY24. 

Financial Summary 

Amount in ₹ Cr Q3 FY24 Q3 FY25 FY23 FY24 
Revenue 31965 34793 117627 130978 
Expenses 25073 27997 96038 103783 
EBITDA 6893 6796 21589 27195 
OPM 22% 20% 18% 21% 
Other Income 256 379 3733 783 
Net Profit 2603 1844 11078 9926 
NPM 8.1% 5.3% 9.4% 7.6% 
EPS 22.3 13.7 100.3 85.4 
Ambuja Cement and UltraTech Q3 FY25 Results
Q3 FY25 Results: Ambuja Cement Profit Surges 157% YoY to ₹2,115 Cr, UltraTech Profit Falls 17% to ₹1,470 Cr; Revenue Growth Continues

Ambuja Cements Ltd: Overview 

Ambuja Cements Ltd, a part of the Adani Group, is one of India’s leading cement manufacturers, known for its strong market presence and commitment to sustainable development. The company operates through an extensive network of integrated cement plants, grinding units, and a robust distribution system that spans across the country. Ambuja specializes in producing high-quality cement products, including Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC), catering to a wide range of construction needs in residential, commercial, and infrastructure projects. With a focus on operational efficiency, cost optimization, and sustainable practices, Ambuja Cements has adopted advanced manufacturing technologies, waste heat recovery systems, and renewable energy initiatives to enhance its production capabilities and reduce carbon emissions. Additionally, the company benefits from its strong brand recognition, extensive dealer network, and continuous investments in research and development, positioning itself as a key player in the competitive cement industry. The Indian cement industry is poised for strong growth, driven by increasing infrastructure development, housing demand, and government initiatives such as the Pradhan Mantri Awas Yojana (PMAY) and Smart Cities Mission. The sector is expected to benefit from large-scale investments in roads, highways, metros, and rural development projects. The growing emphasis on sustainability and green cement production is also reshaping the industry, with companies investing in alternative fuels, energy-efficient technologies, and carbon reduction strategies. While the industry faces challenges such as rising input costs, supply chain disruptions, and environmental regulations, demand remains robust due to strong economic growth, rapid urbanization, and continued policy support from the government. 

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In Q3 FY25, the company achieved the highest percentage of trade sales among peers at 71%, primarily catering to the profitable Individual House Builder (IHB) segment. Premium cement contributed 26% of trade sales during the quarter, positioning the company among the industry leaders in this segment. Since the Adani acquisition from Holcim in September 2022, cost reductions have amounted to 17%, significantly improving operational efficiency. The sanctioning of additional houses under the Pradhan Mantri Awas Yojana has led to increased demand in Q3, with further improvement expected in Q4 FY25. The office market is experiencing robust growth, with leasing space projected to expand by 8% to 10%, driven by the rapid development of Global Capability Centers. Additionally, India’s data center industry is witnessing exponential growth, fueled by advancements in AI and the nationwide rollout of 5G technology, with capacity expected to grow by 66% by 2026. Government capital expenditure on infrastructure, which accounts for 25-30% of cement demand, is anticipated to accelerate in the second half of FY25. In Q3 FY25, the company added 631 million metric tonnes of new limestone reserves, bringing the total reserves to approximately 8,300 million metric tonnes. Freight and forwarding costs were reduced by 15%, primarily due to network optimization, which resulted in a 7% reduction in primary lead distance and a 17% reduction in secondary lead distance. 

Q3 FY25 Earnings 

  • Revenue of ₹9329 crore in Q3 FY25 up by 14.8% YoY from ₹8129 crore in Q3 FY24.  
  • EBITDA of ₹1712 crore in this quarter at a margin of 18% compared to 21% in Q3 FY24. 
  • Profit of ₹2620 crore in this quarter compared to a ₹1091 crore profit in Q3 FY24. 

UltraTech Cements Ltd: Overview 

UltraTech Cement Ltd, a subsidiary of the Aditya Birla Group, is India’s largest cement manufacturer and a dominant player in the global cement industry. With an extensive production capacity of over 140 million tonnes per annum (MTPA), UltraTech is known for its wide product portfolio, which includes Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Ready-Mix Concrete (RMC), white cement, and specialty building products. The company has a strong presence across India, the Middle East, and other international markets, supported by its integrated cement plants, clinkerization units, and grinding stations. UltraTech’s growth strategy is driven by continuous capacity expansion, efficiency improvement, and sustainability initiatives, including the use of renewable energy, alternative raw materials, and carbon capture technologies. The company has also been actively acquiring assets to strengthen its market leadership, including the integration of assets from Jaypee Cement and Binani Cement. UltraTech’s financial strength, operational excellence, and commitment to innovation make it a formidable force in the cement industry. The Indian cement industry is expected to witness steady growth, supported by rising infrastructure investments, increased urbanization, and favourable government policies. The demand for cement is projected to rise due to massive public and private sector investments in roads, railways, ports, and urban housing projects. Additionally, the real estate sector’s recovery, coupled with rising per capita cement consumption, is expected to boost the industry’s long-term prospects. However, the sector faces challenges such as rising costs of raw materials, energy, and logistics, which could impact profitability. The industry is also undergoing a transformation with increased emphasis on sustainability, digitalization, and advanced manufacturing processes to improve efficiency and reduce carbon footprints. UltraTech Cement, with its scale, strong distribution network, and technological advancements, is well-positioned to leverage these trends and maintain its leadership position in the cement market. 

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The infrastructure segment experienced a decline due to pollution control measures implemented in Delhi and nearby regions, as well as project delays caused by the farmers’ agitation in Punjab. Additionally, the average lead distance reduced to 377 km in Q3 FY25 compared to 397 km in Q3 FY24. The housing segment, on the other hand, registered growth across most regions, except in Prayagraj, where restrictions on heavy vehicle movement due to Kumbh Mela preparations impacted demand. In Maharashtra, the infrastructure sector witnessed a slowdown due to lower fund flows attributed to the state assembly elections, while in Gujarat, housing demand remained largely flat. UltraTech Cement made a strategic investment by acquiring a non-controlling financial stake of 8.42% in Star Cement Limited at a total cost of ₹776 crore. The clinker conversion ratio improved to 1.45 in Q3 FY25, compared to 1.43 in the same quarter of the previous year, reflecting enhanced efficiency in cement production. Additionally, the share of green power in the overall energy mix increased to 33.4% in Q3 FY25, up from 32.0% in Q2 FY25. Additionally, the company signed an agreement to deploy approximately 100 electric trucks to transport 75,000 metric tonnes of clinker monthly from its Dhar Cement Works in Madhya Pradesh to Dhule Cement Works in Maharashtra, covering a 400 km round trip. Realizations declined by 9.6% year-on-year but showed a slight improvement of 1.4% on a quarter-on-quarter basis. 

Q3 FY25 Earnings 

  • Revenue of ₹17193 crore in Q3 FY25 up by 2.17% YoY from ₹16740 crore in Q3 FY24.  
  • EBITDA of ₹2886 crore in this quarter at a margin of 17% compared to 19% in Q3 FY24. 
  • Profit of ₹1474 crore in this quarter compared to a ₹1775 crore profit in Q3 FY24. 
UltraTech Cement and Ambuja Cements
Future of Cement in India: Key Updates and 2025 Growth Outlook

The Indian cement industry is poised for growth in 2025, expecting improved sales realizations, higher margins, and accelerated demand. This optimism is largely fuelled by government infrastructure spending and the ongoing consolidation within the industry, driven by two major players: UltraTech Cement (part of the Aditya Birla Group) and Ambuja Cements (led by billionaire Gautam Adani). 

Key Developments in the Cement Sector: 

  • Acquisitions and Capacity Expansion: Both UltraTech Cement and Adani’s Ambuja Cements are making substantial investments to expand their market share. Together, they are acquiring over 50 million metric tons per annum (MTPA) capacity for approximately USD 4.5 billion. Adani Cement, which entered the sector relatively recently, has significantly expanded its footprint by acquiring several cement companies, including Saurashtra-based Sanghi Industries and Penna Industries, and a recent agreement to acquire CK Birla Group’s Orient Cement. With these acquisitions, Adani Cement crossed a 100 MTPA capacity, and plans are in place to reach 140 MTPA by FY28, nearly matching UltraTech Cement’s 156.66 MTPA capacity. 
  • Consolidation and Industry Leadership: The cement sector is seeing increased consolidation, with UltraTech Cement and Ambuja Cements collectively controlling a significant portion of India’s cement production capacity. In fact, the top five cement producers now account for approximately 60–65% of the industry’s total capacity. UltraTech Cement, aiming to maintain its lead, plans to reach 200 MTPA capacity by FY27, underscoring its aggressive growth strategy. 

Industry Challenges and Trends in 2024: 

  • Declining Cement Prices: The first half of FY25 saw a 10% year-on-year decline in cement prices, with the average price dropping from Rs 365 per bag in FY24 to Rs 330 per bag. This price drop reflects challenges within the industry, including moderate capacity utilization and lower sales realizations. Despite this, cement prices recovered on a month-to-month basis, rising by 2% in September 2024 compared to the previous month. 
  • Lower Growth in 2024: Cement industry growth in 2024 slowed to around 4.5–5.5%, compared to a more robust 10% growth in previous years. This slowdown was attributed to several factors: A prolonged heatwave and labour shortages during general elections. Seasonal monsoon disruptions that affected construction activity. 
  • Capacity Utilization and Volumes: Capacity utilization levels remained moderate at 70%, as several players struggled with underutilized capacity due to slow growth in demand and the impact of low cement prices. However, the industry’s outlook for the second half of FY25 is more optimistic, with expectations of a 4-5% increase in cement volumes driven by higher rural consumption, increased urban housing demand, and a boost in government infrastructure spending. 

Outlook for 2025 and Beyond: 

  • Government Infrastructure Push: A significant boost to the sector is expected from the government’s increased expenditure on infrastructure projects. This is anticipated to drive a rise in cement demand, especially in the housing and rural sectors. The industry’s growth is also being supported by higher capital expenditure from both the government and private sector players, which is likely to result in greater cement consumption. 
  • Capacity Additions and Expected Growth: The Indian cement industry is adding 35 MTPA of capacity in FY25, with an additional 70-75 MTPA capacity expected to come online in FY25-26. Despite this, overall capacity utilization is expected to remain moderate at 70% due to a lag in demand catching up with supply. The Cement Manufacturers’ Association (CMA) forecasts that cement volumes will grow by 4-5% year-on-year, reaching 445-450 million MT in FY25. 
  • Industry Transformation: The cement industry is undergoing a transformation, driven by a growing emphasis on sustainability, innovations, and increased demand for both housing and infrastructure. The Indian cement market, which now has a total capacity of 690 million tonnes, is expected to see improved price realizations and better capacity utilization in the coming years. 
UltraTech Cement Ltd
UltraTech Cement Ltd: Paving the Path to Market Leadership and Sustainability

Company Overview 

UltraTech Cement Ltd., a flagship company of the Aditya Birla Group, is India’s largest manufacturer of grey cement, ready-mix concrete (RMC), and white cement. Established in 1983, the company has a strong presence across India, UAE, Bahrain, and Sri Lanka. UltraTech operates 23 integrated manufacturing units, 28 grinding units, and 7 bulk terminals, making it a leading player in the global cement industry. It has installed cement manufacturing capacity of approximately +140 million tonne per annum and has employee strength over 23000 in FY24. UltraTech is a pioneer in sustainability initiatives, with a focus on reducing carbon emissions, renewable energy adoption, and circular economy practices. It is committed to achieving carbon neutrality by 2050. 

Return Summary 

YTD 1 Month 6 Month 1 Year 2 Year 3 Year 5 Year 
4.58% -0.97% 7.91% 25.87% 59.37% 48.54% 155.7% 

3 Year Return: UltraTech Cement v/s NIFTY 

Result Highlights 

  • Revenue of ₹15,635 in Q2 and EBITDA of ₹2017, which is multi quarter low because of monsoon season, election pressure and high cost compared to revenue. 
  • UltraTech Cement’s capacity utilization at 68% with 3% growth in volume terms for Q2 FY25. 
  • The high-cost fuel contracts are at end and by Q3 the prices will further go down and costs dropping to ₹1.84 per Kcal, down 8% QoQ. 
  • Government focus on Metros, Roads, and Housing schemes will benefit cement companies. 
  • The company will be expanding its capacity by 8 million tons reaching 158 million tons capacity. 
  • The Kesoram Cement acquisition at ₹7500 crore, and it will strengthen and expand the south market footprint and will reach the target of total capacity of 200 million tons by 2028. 

Shareholding Pattern 

Return Comparison with Peers 

COMPANY 1 Year 2 year 3 Year 5 Year 
UltraTech Cement 26.03% 59.57% 48.72% 156.08% 
Ambuja Cement 18.97% (9.75%) 37.77% 150.30% 
Shree Cement (2.00%) 9.05% (1.54%) 20.58% 
JK Cements 16.05% 37.46% 27.79% 258.90% 
JK Lakshmi Cements (1.39%) 15.34% 23.17% 173.19% 

Contribution to Industry Size 

Being the largest cement company in Cement industry, UltraTech Cement with ₹318,000 crore market capitalizations having 24% market share of the industry. Expanding its footprint and having highest market share in North, South, West and East of India. Promoting the use of renewable energy resources for its production process and reducing the use of coal and pet coke. The company extensive operations include 23 integrated plants, 28 grinding units and 7 bulk terminals, enabling to serve the market efficiently. 

Balance Sheet Analysis 

  • Reserves, fixed assets and capex is increasing every year, showing a great sign of growth. 
  • Company has debt on its balance sheet but has enough cash to pay it, hence it is net debt free. 
  • The excess cash is used to acquire new business to have more growth through inorganic way as business is at mature stage to grow fast. 

Cash Flow Analysis 

  • Cash flow from Operations is ₹10,898 crore in FY24 and is positive for more than 10 years. 
  • Purchase of fixed assets is in increasing trajectory every year on year, showing a great sign of expansion and growth of company. 
  • The borrowing has been stable and is very low maintaining its debt to equity ratio.