UltraTech Aims India Cements Turnaround by 2025
UltraTech Cement Ltd has unveiled an ambitious strategy to transform the performance of India Cements Ltd (ICL) within 12 months, aiming to revitalise the Chennai-based cement maker by January 2025. With UltraTech now holding an 81.49% majority stake in ICL following its successful open offer at ₹390 per share, the company has prioritised operational efficiency and growth to reverse India Cements’ recent losses.
India Cements, which became UltraTech’s subsidiary on December 24, 2024, has been grappling with financial challenges. In Q3FY25, the company reported a net loss of ₹429 crore, a significant deterioration from the ₹17 crore loss recorded in the same quarter last year. Net sales also dropped sharply to ₹903 crore from ₹1,082 crore. Over the nine months of FY25, ICL’s net loss rose to ₹592 crore, compared to ₹173 crore during the same period in FY24. UltraTech’s strategic roadmap includes debottlenecking key plants and expanding operations at select locations. The company has identified significant capacity utilisation gaps, with ICL operating at just 57% of its total 14.45 million tonnes capacity. Of this, 13 million tonnes are based in the South, and 1.5 million tonnes in the North. Enhancing plant efficiency and utilisation is a core focus, alongside investments in waste heat recovery systems (WHRS) to achieve long-term cost savings.
The first tangible results of these efforts are expected by the October–December 2026 quarter, with initial improvements anticipated by the end of FY25. UltraTech also plans to finalise a comprehensive strategy within a quarter, aligning ICL’s operational framework with its profitability goals. India Cements’ acquisition cost remains economical, with a dollar-per-tonne valuation below $100, contrary to earlier speculations of $120. As of December 31, 2024, ICL’s net debt stood at ₹877 crore, with plans to reduce this burden using cash from non-core asset monetisation. On the branding front, UltraTech clarified that ICL no longer has cricket partnerships, including its earlier association with Chennai Super Kings (CSK). However, ICL will retain ownership of brands like CSK Cement while steering clear of future sports sponsorships. UltraTech’s vision reflects a disciplined approach to unlocking ICL’s potential, driving profitability, and delivering value for stakeholders, all while adhering to regulatory requirements to reduce its stake to 75% in due course.
