UDAICEMENT - Udaipur Cement

📊 NSE: UDAICEMENT 🏢 Cement - North India 📅 Last Updated: 12/14/2025 14:37

💰 Financial Performance

Revenue Growth by Segment

Operating income for the cement segment grew 13% YoY in fiscal 2024 to INR 1,166 Cr and further increased 31.2% YoY in the first half of fiscal 2025 due to incremental sales from new capacity.

Profitability Margins

PAT margin improved from 3.5% in fiscal 2023 to 4.8% in fiscal 2024. However, EBITDA per tonne declined to Rs 478 in H1 FY25 from Rs 621 in H1 FY24 due to lower realization.

EBITDA Margin

EBITDA per tonne increased to Rs 747 in fiscal 2024 from Rs 685 in fiscal 2023, representing a 9% YoY improvement in core profitability driven by lower power and fuel costs.

Capital Expenditure

The company utilized rights issue proceeds and drew down additional debt to fund a brownfield expansion of 2.5 MTPA grinding capacity and 1.5 MTPA clinker unit, with a term loan of INR 1,100 Cr availed for this purpose.

Credit Rating & Borrowing

Parent company JKLC is rated CRISIL AA/Stable. UCWL's interest coverage stood at 2.9 times in fiscal 2024, up from 2.84 times in fiscal 2023.

⚙️ Operational Drivers

Raw Materials

Key raw materials include coal and pet coke, which are primary components of power and fuel costs. Specific percentage of total cost for each is not disclosed.

Capacity Expansion

Current capacity includes a newly commissioned 2.5 MTPA brownfield grinding facility and a 1.5 MTPA clinker unit. The merger with JKLC will consolidate these fragmented capacities into a single entity.

Raw Material Costs

Power and fuel costs decreased in fiscal 2024, contributing to higher EBITDA per tonne, but remain susceptible to volatility in coal and pet coke prices.

Manufacturing Efficiency

Manufacturing efficiency is expected to improve as volume ramps up from the newly commissioned facility, which is projected to improve the net debt to EBITDA ratio over the medium term.

Logistics & Distribution

The merger will lead to synergies in distribution processes and logistic alignment, reducing the time to market for cement products.

📈 Strategic Growth

Expected Growth Rate

31.20%

Growth Strategy

Growth will be achieved through the ramp-up of the 2.5 MTPA brownfield expansion and a strategic merger with parent JK Lakshmi Cement Ltd (JKLC). This consolidation will eliminate subsidiary discounts, provide unfettered access to cash flows, and enable a dedicated management focus on independent expansion strategies.

Products & Services

Cement bags and clinker.

Brand Portfolio

JK Lakshmi Cement.

Market Expansion

The merger aims to provide a uniform product and service experience across regions, though specific target regions are not listed.

Strategic Alliances

Proposed merger of Udaipur Cement Works Ltd (UCWL), Hansdeep Industries & Trading Company Ltd (HITCL), and Hidrive Developers & Industries Ltd (HDIL) into JK Lakshmi Cement Ltd (JKLC).

🌍 External Factors

Industry Trends

The industry is characterized by sporadic capacity additions and long gestation periods, leading to unfavorable price cycles. Current trends show a shift toward consolidation to achieve economies of scale and better financial health.

Competitive Landscape

The industry faces intense competition and loss of market share risks; UCWL competes with other regional and national cement players.

Competitive Moat

The company's moat is derived from its strategic importance to JKLC, integrated manufacturing facilities with WHRS, and high financial flexibility supported by the parent group.

Macro Economic Sensitivity

The company is highly sensitive to the cyclicality of the cement industry and infrastructure demand, which impacts price cycles and offtake.

Consumer Behavior

There is an increasing demand for uniform product quality and improved service levels, which the company aims to address through its consolidated group structure.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013 and NCLT mandates. The merger requires approvals from SEBI, Stock Exchanges, and jurisdictional NCLT benches.

Environmental Compliance

The company faces potential regulatory measures and litigation risks related to climate change and environmental standards.

Taxation Policy Impact

The company has undertaken to comply with Income Tax and GST laws, including any demands or taxes payable upon the implementation of the merger scheme.

Legal Contingencies

The company is involved in NCLT proceedings for its merger scheme (CP (CAA) No. 05/230-232/JPR/2025). It is also required to pay legal fees and costs to the Central Government as determined by the NCLT.