UltraTech Cement Ltd. expects further cement price increases in the coming months as it seeks to offset higher fuel costs, with the full benefit of recent hikes expected to reflect in its earnings for the December quarter.
The company's average trade prices rose 7–10% per bag month-on-month in the second half of September, while October spot prices were about 5% above the average for the September quarter, Chief Financial Officer Atul Daga said during the company's Q2 FY27 earnings call.
The price increases come as fuel costs have risen, putting pressure on cement makers to protect profitability. UltraTech expects the higher realisations to support earnings in the second half of the financial year, although the outlook for input costs remains uncertain.
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Price Outlook
“Prices have risen substantially in the month of October and continue to stay high,” Daga said, adding that further price improvements could follow over the next couple of months.
Pan-India average trade prices were broadly stable sequentially in Q2, although the quarterly average was 1–1.5% lower, mainly because of weaker prices in August. Prices moved higher in the second half of September, lifting the run rate entering the December quarter.
UltraTech expects the full benefit of these increases to reflect in Q3 earnings rather than immediately. Daga said festive weeks could slow the pace at which the market absorbs higher prices.
Cost Pressure
Fuel costs rose to Rs 51.50 per bag from Rs 45, Daga said. The company also reported higher fuel and raw material costs during the quarter.
Management remains uncertain about whether input costs have peaked. Responding to a question on the outlook for fuel inflation, Daga said he could not comment on whether costs had reached their highest levels.
The company intends to offset the pressure through price increases. Asked whether EBITDA per tonne would remain higher year-on-year over the next two quarters, Daga said, “That's the intention.”
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Volume Growth
UltraTech's domestic grey cement volumes rose 13.8% year-on-year to 35.94 million tonnes in Q2 FY27. Capacity utilisation increased to 71% from 66% a year earlier.
Consolidated net sales rose 18.9% year-on-year to Rs 23,024 crore, while profit after tax increased 21.3% to Rs 1,501 crore.
The company expects stronger pricing, higher volumes and operating efficiencies to support its performance in the coming quarters, while the trajectory of fuel costs remains a key variable.
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