UltraTech to invest Rs 6,500 crore to increase cement making capacities by 19.8 MT: Kumar Mangalam Birla

UltraTech Cement plans to invest close Rs 6,500 crore on a growth plan to increase capacities by 19.8 million tonnes MT in FY 22 and FY 23, said its chairman Kumar Mangalam Birla.
“These expansions, once commissioned, would further strengthen your company’s market share and financial performance,” said Birla in his address to the company’s shareholders at the annual general meeting held on Wednesday.
Upon completion of the latest round of expansion, UltraTech’s capacity will grow to 136.25 MTPA, reinforcing its position as the third-largest cement company in the world, outside of China, Birla added.

The company is also optimising its capital structure and has prepaid long-term loans amounting to Rs 5,000 crores in July 2021.

“During FY21, your company repaid long-term debt amounting to Rs. 5,227 crores and also repaid short-term loans as per due dates,” Birla added.

The repayments were done through operating cash flows generated, despite the challenging circumstances and severe business interruptions during Q1FY21.

All of these resulted in improved net debt: equity ratio and Net Debt / EBITDA ratio, Birla said.

In FY21, UltraTech recorded net revenues of US$ 6.0 billion (Rs. 44,726 crores) and an EBITDA of US$ 1.66 billion (Rs.12,302 crores).

Birla said that the economy is getting back to pre-pandemic levels and expects the economy to grow a little below 10% in FY 22.

“The fiscal stance clearly seems to be poised for an acceleration of government capex in the coming years, especially with the national infrastructure pipeline projects,” Birla said, adding there are very strong signals of a pick-up in the private sector capex cycle, driven by companies like UltraTech.

“The three factors of cyclical upswing, conducive policy impulses and an improving global backdrop is likely to align themselves to position India for a virtuous cycle of growth and investments in the medium-term,” Birla said.

In FY21, UltraTech adopted science-based targets as part of its climate commitment to reduce CO2 emission/ MT cement.
“The goal is to reduce emissions by 27% till 2032 over the base of 2017. Plans have been articulated to achieve this target,” Birla said.