According to reports from Business Standard, CARE Ratings has reaffirmed the long-term rating of India Cements at 'CARE AAA' with a 'stable' outlook. The agency has also affirmed the company's short-term rating at CARE A1+. The ratings continue to reflect the company's strong parentage of UltraTech Cement and ICL's strategic importance to UltraTech, with the company being expected to benefit from operational synergies flowing through from its parent in the medium term.
As reported by Business Standard, India Cements has installed cement capacities of 14.75 metric tonne per annum (MTPA) with 13.25 MTPA in South India, maintaining an established market position in the region. The company has completed 100% migration of legacy India Cements brands to the UltraTech branding platform, with sales now routed entirely through UltraTech which leverages its own dealer network and distribution channels. ICL supplies cement directly to UltraTech as its sole customer, with the company having integrated operations including presence of captive power plants and limestone reserves.
According to Business Standard, the company's capital structure has significantly improved in FY26 through debt reduction from cash flow generated from recoupment of loans and advances from group entities of erstwhile promoters' sale of the Parlie grinding unit, reduction in capital advances, and sale of land and buildings and other non-core assets. UltraTech announced a capital expenditure plan of ₹2,000-2,050 crore to address operational efficiencies at ICL plants, which is expected to improve operating profitability in the medium term.
As reported by Business Standard, CAREEdge Ratings notes that ICL has been operating at moderate scale with subdued profitability, partly due to market-related dynamics and partly legacy issues in addressing operational inefficiencies under erstwhile promoters. The company remains exposed to cyclicality inherent in the cement industry and volatility in input costs and realisations with its presence in the Southern India cement market which is characterized with overcapacity. The ongoing geopolitical tensions may lead to volatility in pet coke prices, though the impact is partly mitigated by availability of raw material inventory sufficient for a quarter of operations.
According to Business Standard, the India Cements scrip had risen 0.35% to end at ₹384 on the BSE on Thursday. The company became a subsidiary of UltraTech on 24 December 2024, following UltraTech's acquisition of a 55.49% majority stake, which increased to 81.49% post open offer. Currently, UltraTech holds 75% control in the company.
