UltraTech Cement's Baa3 rating affirmed by Moody's; outlook stable

UltraTech Cement Limited announced that Moody's Ratings has affirmed its Baa3 issuer and senior unsecured ratings, maintaining a stable outlook. This affirmation reflects UltraTech's strong market position, a robust balance sheet, and a favorable industry environment expected to drive demand and earnings growth.

The company completed significant capacity expansions during the fiscal year ended March 31, 2025 (FY24-25), adding 16m tons through greenfield projects and 26m tons via acquisitions. UltraTech aims to further expand its production capacity to 218m tons per annum (mtpa) by March 2027, up from 192.3 mtpa as of June 2025.

Moody's projects UltraTech's revenues to grow by 13% to INR850bn in FY25-26, with subsequent annual growth rates of 7%-8%. EBITDA margins are expected to improve to 18%-19% over the next 1-2 years, up from 17% in FY24-25, supported by operational improvements and a target EBITDA increase of INR300/ton through cost reductions. Despite anticipated negative free cash flows of INR20bn-INR30bn over the next 1-2 years due to elevated capital spending of around INR105bn, leverage is expected to remain stable at around 1.6x gross debt/EBITDA.