Credit Rating Update
UltraTech Cement Secures CARE AAA Rating for ₹5,000 Crore NCD Issue; Highest Credit Rating Reaffirmed
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- UltraTech Cement Limited has informed the stock exchanges that CARE Ratings Limited has assigned a CARE AAA; Stable rating to the company’s proposed ₹5,000 crore Non-Convertible Debenture (NCD) issue.
- The rating agency has also reaffirmed the company’s existing CARE AAA; Stable / CARE A1+ ratings on its bank facilities, reflecting UltraTech’s strong market leadership, robust financial profile, healthy liquidity, and extensive manufacturing footprint.
PRICE-SENSITIVE TRIGGER
Event: CARE Ratings assigned a CARE AAA; Stable rating to UltraTech Cement’s proposed ₹5,000 crore NCD issue and reaffirmed the company’s existing highest credit ratings on bank facilities.
Type: Credit Rating Update
Impact: Positive
Immediate Effect: The highest credit rating reinforces UltraTech’s strong creditworthiness, enhances investor confidence, and supports its ability to raise funds at competitive borrowing costs for future expansion.
Metrics:
Key Financial Metrics:
- FY26 Total Operating Income: ₹88,512 crore
- FY26 PBILDT: ₹17,020 crore
- FY26 PAT: ₹8,188 crore
- Q1 FY27 Total Operating Income: ₹24,648 crore
- Q1 FY27 PBILDT: ₹5,015 crore
- Q1 FY27 PAT: ₹2,604 crore
- Overall Gearing (FY26): 0.45x
- Interest Coverage (FY26): 9.09x
- Interest Coverage (Q1 FY27): 11.07x
Highlight:
- CARE Ratings assigned a CARE AAA; Stable rating to the proposed ₹5,000 crore NCD issue while reaffirming UltraTech’s CARE AAA; Stable / CARE A1+ ratings on existing bank facilities.
What Happened ?
UltraTech Cement informed the stock exchanges that CARE Ratings has assigned the highest long-term credit rating of CARE AAA; Stable to its proposed ₹5,000 crore non-convertible debenture issuance.
Alongside the new assignment, CARE reaffirmed:
- ₹14,700 crore long-term/short-term bank facilities at CARE AAA; Stable / CARE A1+
- ₹2,400 crore long-term bank facilities at CARE AAA; Stable
The rating reflects UltraTech’s dominant market position, strong operating performance, healthy capital structure, and superior liquidity profile.
key details
Rating Rationale:
- CARE highlighted UltraTech’s position as India’s largest cement manufacturer.
- Installed domestic grey cement capacity stands at 200.1 MTPA, with 205.5 MTPA including overseas operations.
- The company plans to add approximately 37 MTPA of additional cement capacity by FY28-end.
- Expansion is expected to increase total installed capacity to over 242.5 MTPA.
- The rating also reflects the company’s diversified manufacturing footprint across India and overseas markets.
Financial Strength:
- Healthy capital structure supported by sustained internal accruals.
- Net debt to PBILDT improved to 1.38x as of March 31, 2026, from 1.89x a year earlier (including security deposits and letters of credit).
- Overall gearing improved to 0.45x from 0.50x.
- Strong operating cash flows continue to support ongoing capital expenditure and acquisitions.
- CARE expects leverage to remain comfortable despite expansion plans.
Growth & Expansion:
- Approximately 37 MTPA of additional cement capacity is under development.
- Renewable power capacity is targeted to reach 2 GW by FY27-end.
- Waste Heat Recovery System (WHRS) capacity is planned to increase from 414 MW to 435 MW.
- The company aims to source nearly 85% of its power requirement from green energy by FY30.
- Brand integration of India Cements and Kesoram Cement operations has been completed, supporting operational synergies.
Note
- CARE Ratings believes UltraTech’s continued capacity expansion, energy efficiency initiatives, and diversified geographic presence strengthen its long-term competitive positioning and support sustained growth.
Risk Analysis
Summary:
- While UltraTech maintains the highest credit rating, CARE Ratings highlighted industry cyclicality and raw material cost volatility as key monitorable risks.
Key Risks:
- Cyclical nature of the cement industry.
- Volatility in coal, pet coke, gypsum, fly ash, and slag prices.
- Higher freight costs due to diesel price movements.
- Geopolitical tensions may increase fuel costs.
- Large debt-funded acquisitions or capex could pressure leverage if net debt exceeds targeted levels.
Worst Case:
- Persistent input cost inflation or significantly higher debt-funded expansion could weaken profitability and leverage metrics, potentially putting pressure on future credit ratings.
Risk Level: Low
Company Commentary
- CARE assigned CARE AAA; Stable to the proposed ₹5,000 crore NCD issue.
- Existing bank facilities continue to carry CARE AAA; Stable / CARE A1+ ratings.
- Ratings reflect UltraTech’s market leadership, diversified manufacturing footprint, healthy liquidity, and strong financial profile.
- CARE expects the company to maintain comfortable leverage while continuing its expansion strategy.
Official Exchange Filing: UltraTech Cement Limited
