JP Morgan, Morgan Stanley, and Jefferies all preferred UltraTech Cement over Shree Cement after the Q1 FY27 results, with pricing and cost control at the centre of their views. According to reports from The Financial Express, JP Morgan preferred UltraTech, citing its scale and ability to manage margins and volumes, while Morgan Stanley also pointed out its preference for the stock over peers and maintained an Underweight view on Shree Cement. The latest development shows Jefferies retaining a 'Buy' rating on UltraTech, citing the potential for higher trading volumes and earnings. The brokerage preference comes as both companies focus on sustaining pricing while managing costs.
The Q1 results showed strong volume growth at both companies, but different margin outcomes. As reported by The Financial Express, UltraTech maintained operating EBITDA per tonne above ₹1,200, while Shree Cement's operating EBITDA per tonne declined to ₹1,111 from ₹1,339 in Q1 FY26 as fuel and raw-material costs rose. UltraTech reported consolidated revenue of ₹24,465 crore, EBITDA of ₹5,146 crore and PAT of ₹2,604 crore in Q1 FY27, with consolidated cement volume increasing 12.2% year-on-year to 41.31 million tonnes and capacity utilisation rising to 81%. Shree Cement's consolidated volume increased to 114.5 lakh tonnes from 99.6 lakh tonnes, but operational EBITDA declined to ₹1,272 crore from ₹1,333 crore.
UltraTech faced cost pressures from West Asia disruption, with fuel cost increasing to ₹915 per tonne from ₹874 per tonne. According to The Financial Express, management said the company had absorbed the cost impact while renewable power met about 47% of its total power requirements at the end of the quarter. Shree Cement faced more direct disruption, with pet coke's share of fuel mix falling to 9% from 54%, while coal increased to 81% from 32%. Fuel cost rose to ₹1.95 per kcal from ₹1.82 per kcal, and the shortage of Omani gypsum forced procurement of more expensive domestic gypsum.
UltraTech's consolidated cement volume increased 12.2% year-on-year in Q1 FY27, while domestic grey cement volume rose 13.1%. As reported by The Financial Express, capacity utilisation increased to 81% from 76%. Shree's consolidated volume increased to 114.5 lakh tonnes from 99.6 lakh tonnes, with Indian operations recording volume growth of more than 15%. UltraTech ended Q1 FY27 with total capacity of 205.5 million tonnes, including 200.1 million tonnes in India, and commissioned 8.7 million tonnes of grey cement capacity during the quarter.
UltraTech expects capacity additions and improvement initiatives to support operating performance, with management expecting EBITDA per tonne of ₹1,400 in the January-March 2028 quarter provided there is no war. According to The Financial Express, Shree maintained its FY27 volume guidance at 40 million tonnes and expects healthier profit from Q2 FY27 onwards. UltraTech expects India capacity to reach 212 million tonnes by March 2027 and 235 million tonnes by March 2028, while Shree expects UAE capacity to reach 7 million tonnes by Q3 FY27. Additionally, UltraTech is acquiring a 26% stake in Solaris Horizon Energy to support its green energy initiatives, while Pilani Investment plans to sell 1.7 million UltraTech Cement shares valued at ₹1,908 crore on August 13, 2026, at a 3% discount.
