Fitch affirms UltraTech's 'BBB-' ratings with stable outlook

Fitch Ratings has affirmed UltraTech Cement Limited's long-term foreign and local currency issuer default ratings (IDRs) at 'BBB-', maintaining a stable outlook. The rating also extends to the company's $400 million 2.80% senior unsecured notes due 2031, which are also rated 'BBB-'. This affirmation reflects Fitch's expectation of a modest leverage profile, with EBITDA net leverage sustained around 1.5x, a leading market position in India, and cost-efficient operations.

The company is projected to achieve a significant improvement in its Fitch-adjusted EBITDA net leverage to 1.5x by March 2026 (FY26) from 1.8x in FY25. UltraTech anticipates a robust cement sales volume CAGR of 10% from FY26-FY28, outpacing the broader Indian cement industry's 7%-8% annual growth. Furthermore, the Fitch-adjusted unit EBITDA margin is expected to exceed INR1,000 per tonne (t) in FY26, up from INR906/t in FY25.

UltraTech plans substantial capital expenditure for growth and product diversification, aiming to expand its grey cement capacity by approximately 25% to 235 million tonnes per annum (mtpa) by FYE28, with an expected spend of around INR100 billion. The company also intends to diversify its product footprint by establishing a wire and cable manufacturing plant at a cost of approximately INR18 billion, scheduled for commissioning by December 2026.