Synopsis:
UltraTech Cement’s MPS Committee approved divesting 2.01 crore shares, a 6.49% stake in India Cements, via stock exchange, drawing investor focus despite weak Q1.
Known for its strong presence in the cement industry, the company has been a key player in driving growth within the sector. In a recent development, its promoters have decided to divest a significant portion of their stake, with the approved sale sparking investor interest and shaping upcoming market discussions.
India Cements Limited’s stock, with a market capitalisation of Rs. 11,852 crores, rose to Rs. 387.85, hitting a high of up to 4.75 percent from its previous closing price of Rs. 370.25. Furthermore, the stock over the past year has given a return of 5.11 percent.
Corporate Action
The MPS Committee of UltraTech Cement has given its approval to divest up to 2.01 crore equity shares, equivalent to a 6.49% stake in India Cements Ltd, via a stock exchange transaction. The floor price for the sale has been set at Rs. 368 per share.
Cost Structure breakdown
The key cost indicators for grey cement in Q1 FY26 reveal important trends in logistics, power & fuel, and raw material costs. Logistics accounted for 20% of total costs at Rs. 916 per metric ton, showing a modest 0.4% quarterly decline and a significant 15% yearly decline.
Power & fuel emerged as the largest expense, comprising 38% of total costs at Rs. 1,690 per metric ton, with costs having dropped by 6% quarter-on-quarter and 7% year-on-year. In contrast, raw material costs stood at 22% of total expenses at Rs. 977 per metric ton, reflecting a 2% increase quarter-on-quarter and a 6% rise year-on-year. These shifts highlight ongoing optimisations in logistics and energy usage, while raw material prices present a persistent upward pressure on overall costs.
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Q1 Financial Highlights
In Q1FY26, India Cements posted revenue of Rs. 1,025 crore, nearly flat YoY compared to Rs. 1,027 crore in Q1FY25, but declining 14.4% QoQ from Rs. 1,197 crore in Q4FY25. The muted YoY trend indicates stagnant topline growth, while the steep sequential drop highlights demand or seasonal pressures.
On profitability, the company reported a net loss of Rs. 133 crore in Q1FY26 versus a profit of Rs. 58 crore in Q1FY25, marking a sharp deterioration YoY. Sequentially too, performance weakened from Rs. 18 crore profit in Q4FY25. The double dip into losses reflects margin pressure and weaker operating leverage despite largely stable revenues.
Written By Fazal Ul Vahab C H
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