Chennai UltraTech Boosts India Cements With Rs 2000cr Capex
Chennai’s cement landscape is poised for structural transformation as UltraTech Cement commits a Rs 2,000 crore capital expenditure over the next two years for its recently consolidated subsidiary, India Cements, in a strategic pivot toward efficiency and growth. This targeted investment aims to modernise ageing assets, reduce energy intensity, and align the business with broader sectoral shifts, signalling a recalibration of capacity and sustainability within one of India’s largest building material segments.
The capex programme will prioritise manufacturing upgrades, including replacing outdated preheater systems with more advanced six-stage units and enhancing process efficiencies that reduce heat demand — a significant cost driver in cement production. Waste heat recovery and digital process optimisation are also central elements, reflecting a shift toward operational sustainability that could help lower thermal energy use, a key factor in both carbon footprint and cost structure in cement manufacturing.For citizens and urban planners alike, these improvements could have downstream effects. Lower production costs and better energy profiles often support more competitive pricing in construction inputs, which can influence infrastructure timelines and housing market dynamics. Energy efficiency gains serve a dual purpose by helping firms manage volatility in fuel markets while also advancing industry contributions to climate resilience goals. Experts say modernising plants across legacy portfolios is essential for maintaining competitiveness as demand from urban infrastructure and affordable housing continues to grow.
This injection of capital builds on UltraTech’s broader expansion strategy. Over recent years, the company has pursued both organic capacity additions and strategic acquisitions to consolidate market share, particularly in the South India region. India Cements’ production capacity is projected to rise to roughly 17.55 million tonnes by March 2027, up from about 14.75 million tonnes in late 2025.Energy transition plays an increasing role in cement sector investments. UltraTech’s planning anticipates raising the share of green power — renewables plus waste heat recovery — from roughly 5% to nearly 80% by 2029 at India Cements, a shift that aligns with industry calls for net-zero pathways and reduced carbon intensity in heavy industries.
Financially, the subsidiary is emerging from a difficult cycle. Recent quarterly results show a swing to positive earnings before interest, tax, depreciation and amortisation (EBITDA) and a significant reduction in losses versus the prior year, an improvement stakeholders attribute to both operational discipline and capital support.Analysts say the investment will also be facilitated by monetising non-core land and overseas assets to keep leverage at sustainable levels, an imperative in capital-intensive segments where debt costs can erode profit margins.
Looking ahead, this capital deployment underscores the cement industry’s ongoing evolution toward efficiency, cleaner operations and capacity scaling — a trend that will influence infrastructure costs, housing affordability and urban development outcomes across India’s fastest-growing regions.
