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ICICI Securities Report
UltraTech Cement Ltd.'s board has approved cement capacity expansion of 22.6 million tonne (~17% of expected FY23 India operations base of 130.9 mnte) at a capex of ~Rs 129 billion ($76/tonne) which the company expects to complete by FY25.
The fresh round of capacity expansion will take UltraTech Cement's total India grey cement capacity to ~154 mnte from current 114.6 mnte, implying 10.4% compound annual growth rate during the next three years.
Factoring-in the said expansion, industry has announced ~110 mnte capacities to be added over the next three years with UltraTech Cement alone adding 35% of it and nearly two-thirds of the additions by the top-four group.
Hence, this would lead to better industry consolidation and better pricing, in our view.
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