- 22 Apr 2024
- ICICI Securities
UltraTech announces new 4.1 mtpa capacity addition plan
ULTRACEMCO - 11302 Change: 79.90 (0.71 %)News: Ultratech cement has announced acquisition of 1.1 million tonnes (mtpa) cement grinding unit (located at Parli, Maharashtra) from India Cements. The company has also approved expanding of this acquired facility by 1.2 mtpa. Additionally, the company will be adding 1.8 mtpa of capacity at its Dhule (Maharashtra) facility. The company will spend Rs 504.4 crore on the 3 mtpa capacity expansions while Rs 315 crore to be spent on the buyout of the 1.1 mtpa Parli unit. The entire capex would be funded through internal accruals.
Views: This acquisition and announcement of fresh capex will help company to further strengthen its presence in Maharashtra market. With the acquisition of 1.1 mtpa capacity, the company's total capacity increased to 152.7 mtpa. Company has been expanding its capacity aggressively (~20 mtpa capacity added in the last 13 months) as the focus remains on growing better than industry and gaining market share across regions. With another 38.5 mtpa expansion plan in process (including the latest 3 mtpa at Maharashtra) and acquisition of Kesoram's 10.75 mtpa, company's total cement capacity will increase to ~202 mtpa by FY27.
Impact: Positive