InvestorQ : How will Ultratech gain from this capacity expansion and why are cement stocks falling?
Neelam Naik made post

How will Ultratech gain from this capacity expansion and why are cement stocks falling?

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Anu Biswas answered.
4 weeks ago
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It is going to be a dominance benefit for Ultratech. It will invest Rs12,886 crore to expand its cement capacity by 22.6 million tonnes per annum (MTPA). That would mean that between now and FY25, Ultratech cement capacity will increase from 119.50 MTPA to 159.25 MTPA. That is more than double the capacity of Adani group post the completion of open offer for of Ambuja and ACC. Ultratech sees greater consolidation in coming years but more importantly, the size of the cement demand market is going to expand too.

Cement demand is likely to get a boost from a number of forces. There is already a big thrust on infrastructure driving cement demand. Also, housing is picking up smartly amidst historically low interest rates. Last but not the least, low cost housing remains the big story going ahead. What Ultratech is really betting on is that the future belongs to cement companies that combine reach with low costs. That is an areas where Ultratech scoring as it is managing scale the best of the lot.

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