Motilal Oswal: UltraTech Cement Revving Up The Volume Growth Engine
A worker levels a slab of cement at a construction site. (Photographer: David Paul Morris/Bloomberg) 

Motilal Oswal: UltraTech Cement Revving Up The Volume Growth Engine

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Motilal Oswal Report

UltraTech Cement Ltd.’s announcement of organic expansion of 19.5 million tonnes per annum (19%) by FY23 is positive on multiple counts.

  1. It provides visibility on above industry volumes at a 10% compound annual growth rate over FY21–24E.
  2. It is incrementally positive for return on capital employed as expansion is at a cost of only approximately $55/tonne, implying ROCE of ~14% (versus 10% currently).
  3. It addresses capital allocation concerns as cash flows over the next two years are deployed in the core business.

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Motilal Oswal Ultratech Cement Company Update.pdf

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