UltraTech Cement Limited: history, ownership, mission, how it works & makes money

A Brief History of UltraTech Cement Limited

UltraTech Cement Limited, a flagship company of the Aditya Birla Group, is the largest manufacturer of grey cement, ready mix concrete (RMC), and white cement in India. Founded in 1983, the company has grown significantly over the decades, driven by strategic expansions and acquisitions.

In 1983, UltraTech began its journey as a part of the Aditya Birla Group. By the late 1990s, the company had established itself with the commissioning of several plants. In 2000, UltraTech acquired the cement business of Larsen & Toubro, significantly enhancing its production capacity.

In 2004, UltraTech became a publicly listed company. The Initial Public Offering (IPO) was priced at ₹600 per share. As of March 2023, UltraTech's market capitalization stood at approximately ₹1.9 trillion, making it one of the most valuable cement companies in India.

The company has consistently expanded its operational capacity. As of March 2023, UltraTech Cement has a consolidated capacity of **114.8 million tons per annum (MTPA)** spread across **22 integrated plants, 27 grinding units, and 1 bulk terminal**.

Financially, UltraTech Cement has shown robust performance. In FY 2022-23, the company reported consolidated revenue of approximately **₹60,000 crore**, marking an increase of **12%** year-on-year. The EBITDA for the same period was around **₹12,000 crore**, reflecting an EBITDA margin of **20%**.

In terms of production volume, UltraTech produced **78 million tons** of cement in FY 2022-23, achieving a capacity utilization rate of **69%**. The company's net profit for the same period was approximately **₹7,000 crore**, translating to an earnings per share (EPS) of **₹125**.

UltraTech has also focused on sustainability. By FY 2025, the company aims to reduce its carbon emissions to **500 kg of CO2 per ton of cement produced**, aligning with its goal of achieving net-zero emissions by 2050.

Furthermore, UltraTech's share price has demonstrated resilience in the market, with a price of around **₹6,500** per share as of March 2023. The stock has provided a return of approximately **30%** in the past year, reflecting strong investor confidence.

As of Q1 FY 2023-24, UltraTech continues to strategically invest in expanding capacity and enhancing operational efficiencies. The outlook remains positive due to the anticipated growth in infrastructure development and housing projects in India.

A Who Owns UltraTech Cement Limited

UltraTech Cement Limited, a part of the Aditya Birla Group, is India’s largest manufacturer of grey cement, ready mix concrete (RMC), and white cement. As of October 2023, the company has a total capacity of around 119.95 million tons per annum (MTPA), making it a leader in the Indian cement sector.

The ownership structure of UltraTech Cement is predominantly held by institutional investors, including mutual funds, foreign portfolio investors (FPIs), and the founding group.

As per the latest data, the individual ownership is relatively low. Key figures indicate that 63.54% of the company is held by the promoter and promoter group, while the remaining is distributed among foreign and domestic institutional investors.

The recent share price of UltraTech Cement is around INR 1,720. Based on this share price, the market capitalization is approximately INR 2,05,000 Crores. The company's financial performance is robust, with a reported revenue of INR 51,051 Crores for the fiscal year ending March 2023, depicting a year-on-year growth of 12.4%.

UltraTech Cement also reported a net profit of INR 7,502 Crores, showcasing an increase of 15% compared to the previous year. The company's EBITDA margin stands at 24.3%, demonstrating strong operational efficiency in the competitive market.

In terms of shareholding pattern changes, FPIs have increased their stake over the past year, reflecting growing confidence in UltraTech's strategic initiatives and growth prospects. The company has consistently focused on expanding its footprint through acquisitions and greenfield projects, further reinforcing its market presence.

UltraTech Cement Limited Mission Statement

UltraTech Cement Limited, a leading player in the Indian cement industry, operates with a robust mission statement aimed at delivering quality and sustainable construction solutions. The company aims to be the most preferred supplier of cement and concrete solutions across the globe.

• Core Mission: To be the largest and the most admired cement company in India.
• Vision: To build a better and sustainable future.
• Values: Integrity, Excellence, Innovation, Sustainability.

The company's mission emphasizes not only cement production but also the commitment to sustainable development. With a focus on quality, UltraTech aims to meet the evolving needs of customers while adhering to stringent environmental standards.

As of FY 2023, UltraTech Cement holds a market share of approximately 22% in the Indian cement industry, leading the sector with a total capacity of 114.8 million tonnes per annum (MTPA). This capacity is spread across 22 integrated plants, 27 grinding units, and 8 bulk terminals located strategically across India.

In terms of financial performance, UltraTech Cement reported the following key figures for FY 2023:

UltraTech’s commitment to sustainability is further showcased through its initiatives aimed at reducing carbon footprints. The company has set a target to reduce its carbon intensity by 25% by 2030. Additionally, UltraTech is actively investing in green energy solutions, aiming to achieve 30% renewable energy use in its operations by the same year.

Innovation is central to UltraTech's mission. The company has invested significantly in research and development, focusing on enhancing product quality and durability. In FY 2023, the R&D expenditure amounted to INR 180 crores, which underscores its commitment to innovation and excellence.

UltraTech Cement's mission aligns with the construction industry's growing demand for sustainable products. The company’s eco-friendly products, such as UltraTech Green Cement, have been well-received, contributing to both customer satisfaction and environmental impact.

The company also engages in community development initiatives, thereby fulfilling its corporate social responsibility. In FY 2023, UltraTech allocated INR 100 crores for various community development programs, focusing on education, healthcare, and infrastructure improvements in the regions where it operates.

In summary, the mission statement of UltraTech Cement Limited reflects its dedication to quality, sustainability, and community engagement, with tangible metrics showcasing its performance and commitment to the industry's future.

How UltraTech Cement Limited Works

UltraTech Cement Limited, a part of the Aditya Birla Group, is one of India's largest manufacturers of cement and concrete. The company operates with a focus on sustainable development, product innovation, and efficiency in manufacturing processes. As of the last reported quarter, UltraTech operates 22 integrated plants, 26 grinding units, and 7 bulk terminals across India.

In FY 2022-23, UltraTech achieved a cement production capacity of 118.2 million tonnes per annum (MTPA). The company reported a total revenue of ₹61,218 crores with an EBITDA of ₹14,663 crores, reflecting a healthy operating margin.

UltraTech's product portfolio includes Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), and specialized products like Ready-Mix Concrete (RMC) and UltraTech Building Solutions.

UltraTech Cement has a diverse distribution network, allowing it to reach various regions in India. The company emphasizes modern logistics and raw material sourcing to optimize costs. The production process utilized by UltraTech is noted for its energy efficiency, utilizing alternative fuels to minimize carbon footprint.

The company is investing in capacity expansions, with plans to increase its production capacity by approximately 22 MTPA by the end of FY 2025. This expansion is expected to support UltraTech's growth strategy in both domestic and international markets.

UltraTech has been focusing on digital innovation through the adoption of advanced data analytics and automation in cement production, which helps bolster operational efficiencies and maintain product quality. This includes investments in AI and IoT technologies to enhance decision-making processes and predictive maintenance in manufacturing units.

Moreover, UltraTech plays a significant role in the construction industry through its commitment to sustainable practices. Their initiatives focus on waste management, water conservation, and renewable energy usage. In FY 2022-23, approximately 25% of the energy consumed by UltraTech’s operations came from renewable sources.

On the stock market, UltraTech Cement Limited is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) under the ticker symbol ULTRACEMCO. As of October 2023, the share price of UltraTech stands at around ₹8,100, reflecting a year-to-date increase of 12%.

How UltraTech Cement Limited Makes Money

UltraTech Cement Limited, a subsidiary of Aditya Birla Group, is the largest manufacturer of grey cement, ready mix concrete (RMC), and white cement in India. The company operates in a highly competitive market, and its revenue generation model is multifaceted.

Cement Production and Sales

UltraTech’s core business revolves around cement production, which accounts for approximately 70% of its total revenue. For the fiscal year 2022-2023, the company reported a total cement production capacity of 114.8 million tonnes per annum (MTPA). In the same period, UltraTech sold around 81.4 million tonnes of cement, generating approximately INR 55,000 crore in revenue from this segment.

Product Diversification

In addition to grey cement, UltraTech produces various products, including:

• Ready Mix Concrete (RMC): Contributed around 9% of the total revenue in FY 2022-2023.
• White Cement: Accounts for about 1% of revenue, with annual sales of 0.6 million tonnes.
• Building Products: Including tiles and wall putty, contributing roughly 2% to overall revenue.

Geographic Reach

UltraTech has a significant presence across India and also exports cement to over 30 countries. In FY 2022-2023, international sales accounted for about 5% of total revenue, translating to INR 2,750 crore.

Cost Management

The operating profit margin for UltraTech Cement stood at 20% as of Q2 FY 2023, driven by effective cost management practices, particularly in energy consumption and logistics. The company's focus on sustainability has led to a reduction in energy costs by 15% over the last two years.

Financial Performance Overview

Strategic Investments

UltraTech has consistently invested in capacity expansion and modernization. Recent strategic investments include:

• Expansion of production capacity in Rajasthan by 4.5 million tonnes, costing approximately INR 3,500 crore.
• Investment in green energy technologies aiming for a 25% reduction in carbon footprint by 2030.

Market Trends

The Indian cement market is expected to grow at a CAGR of 7% from 2023 to 2028. UltraTech aims to capture market share through aggressive marketing and new product launches, including eco-friendly cements.