In a sharp reversal of fortunes, South cement major has delivered a turnaround in the final quarter of FY26 reporting a more than four-fold jump in consolidated net profit on the back of volume growth and tighter cost controls, since the entry of the cement giant Ultratech.
The pull of the Ultratech brand, benefits of full brand integration, change in product mix and reduction in expenses including interest costs have been key levers aiding the revival of ICL, which was hard pressed for working capital and operated at low capacity before Ultratech took over.
Q4 FY26 earnings
ICL posted a net profit of ₹60 crore in the quarter ended March (Q4 FY26), up significantly from around ₹15 crore in the same period last year. For FY26, the company trimmed its net loss to ₹67 crore from a loss of ₹144 crore logged in the same period last year.
Industry sources and analysts told businessline that ICL’s ability to keep costs low and increase capacity utilisation played the decisive role. Capacity utilisation has increased even in old plants of ICL like those in Sankarnagar (Tamil Nadu), Chilamkur (Andhra Pradesh) and Yerraguntla (Andhra Pradesh), they said. Ultratech’s logistics network has also helped ICL get clinker and raw material supply at reduced costs for its plants and also reduced the cost of marketing, they added.
“There is also a change in product mix with Ultratech said to be leaning more towards Portland Pozzolana Cement (PPC) compared to Ordinary Portland Cement (OPC), which was used by ICL earlier. PPC is more economical in terms of production cost,“ a cement industry veteran said.
On the HR front, sources say Ultratech has not undertaken major downsizing. “They have retained the human approach of ICL. But, one major development is that Ultratech has done away with unions and their roles in ICL plants,” the person added.
Ultratech has managed to bring the unit EBITDA to ₹497 per tonne and continues to target ₹1,000 per tonne EBITDA by end of FY28.
Ultratech CFO Atul Daga said in the earnings call this week that 100 per cent brand migration has been completed at the end of March 2026 for ICL.
“Now it will be one product, which is leaving from all nine factories of India Cements as compared to earlier days, there were multiple brands going out… So, the real efficiency, in logistics, seamless operations will be visible now. My performance will go up further in terms of earnings potentials from India Cements,” he said.
Headwinds
Insiders also confirm that ICL’s erstwhile marquee legacy brands such as Sankar and Coromandel are not being bagged anymore. However, analysts note that rising logistics costs and petcoke prices are headwinds in Ultratech’s ability to reach ₹1000/tonne EBITDA with India Cements, and there will be need for capex.
“We had committed ₹1,592 crore for India Cements for efficiency improvement, plus another ₹400 crore for capex on capacity expansion, this definitely is going to take us over ₹1,000 per tonne EBITDA as committed by the end of fiscal 2028,” Daga told analysts in the earnings call.
The various legal cases of ICL, inherited by Ultratech, are also a roadblock for full integration.
“We are trying our level best to get those cases closed because they are donkey’s years old cases, and there’s been no movement. Once we are convinced that there is no risk to us [Ultratech] from these, we could look at the next phase of integration,” said Daga, indicating the pathway to full transition.