UltraTech Cement Ltd Management Discussions

Management Discussion and Analysis

Overview and the State of your Companys Affairs

The global economy entered 2026 navigating a challenging environment. A renewed geopolitical shock in West Asia, persistent trade friction following a marked escalation in tariff measures, and a partial reversal of the disinflation trend that had been underway since 2023, together cast a longer shadow over the near-term outlook. Notwithstanding these headwinds, the international economy continues to demonstrate underlying resilience, supported by accommodative financial conditions in major economies, sustained capital investment in artificial intelligence, clean-energy transition and the steady contribution of emerging Asia to global activity.

In its April 2026 World Economic Outlook, the International Monetary Fund ("IMF") projected world output to expand by 3.1% in 2026 and 3.2% in 2027. The IMF has cautioned that risks remain skewed to the downside, with an adverse scenario placing growth as low as 2.5%, should the conflict in West Asia escalate further. Among the advanced economies, the United States is projected to grow at 2.3% in 2026, the Euro Area at 1.1%, and Japan at 0.7%. The emerging market and developing economies as a group are expected to expand by 3.9% in 2026. India retains its position as the worlds fastest-growing major economy, with the IMF projecting growth at 6.6% for CY26 and 6.5% for FY27, while China is projected to grow at 4.4%.

The principal downside risks to the global outlook include a protraction of the West Asia conflict and a possible disruption of energy flows through the Strait of Hormuz, a further escalation of trade barriers, record levels of public debt in emerging market and developing economies, and a re-emergence of stagflationary pressures. On the upside, sustained investment in artificial intelligence, the resilience of emerging-Asia consumption, the prospect of easing global financial conditions through the year, and the possibility of a durable de-escalation in trade tensions, provide meaningful offsets.

India enters FY27 with the strongest growth profile among the worlds major economies. This momentum is underpinned by sustained public capital expenditure, a reviving consumption cycle, benign domestic inflation through much of the preceding year, the rationalisation and simplification of indirect taxes under GST 2.0 — expected to boost disposable incomes — and the continued resilience of services exports and remittance inflows.

The economy is, however, navigating notable headwinds: elevated international crude prices, tariff-related pressures on the external sector, a record-low rupee and the prospect of a sub-normal monsoon. These external pressures are being actively managed through diversified crude sourcing, proactive trade diplomacy and timely interventions by the Reserve Bank of India. The risk that a deficient monsoon poses to the rural economy is cushioned by a coordinated suite of fiscal and policy supports. Enhanced budgetary outlays under the Pradhan Mantri Awas Yojana - Gramin ("PMAY-G") will sustain rural housing demand; the Mahatma Gandhi National Rural Employment Guarantee Act ("MGNREGA") provides an assured wage floor and demand-side support; and the augmented Minimum Support Price ("MSP") framework for the principal kharif and rabi crops underwrites farm incomes against weather-related shortfalls.

The Union Budget for FY27 has retained an unmistakably infrastructure-led orientation. Total capital expenditure has been pegged at Rs. 12.2 lakh crore, an increase from the revised estimate of Rs. 10.96 lakh crore for the preceding year. The Ministry of Road Transport and Highways has been allocated Rs. 3.10 lakh crore, an increase of 8%, and the Government has announced the new Dedicated Freight Corridor connecting

Dankuni and Surat, seven high-speed rail corridors and twenty new National Waterways. Pursuant to the Union Budget 2025-26 announcement, the Ministry of Finance has created a three-year Public Private Partnership ("PPP") project pipeline of Rs. 17 lakh crore across 850+ projects. The housing sector, which is the largest end-user of cement, has received sustained budgetary support. The Pradhan Mantri Awas Yojana - Urban ("PMAY-U"), comprising both Phase I and Phase II, has been allocated Rs. 18,625 crore in the aggregate for FY27, with 13.61 lakh urban dwelling units having been sanctioned under PMAY-U 2.0 over the preceding eighteen months against the headline target of 1 crore urban homes by 2029. The PMAY-G has been provided Rs. 32,500 crore as Budget Estimate, with an indicative full-year envelope of Rs. 54,917 crore, with the schemes target of 4.95 crore rural homes by 2029.

India remains the second largest cement market in the world and continues to be one of the most consequential markets globally on account of the structural demand emanating from urbanisation, infrastructure creation, housing and an expanding industrial base. Installed cement production capacity at the close of FY26 stood at 718 million tonnes per annum. Independent agencies estimate that 100 million tonnes of new grinding capacity will be commissioned over the two years ending FY28.

Domestic cement demand during FY26 grew by 6.4%, broadly tracking production. For FY27, industry estimates converge in the range of 6 to 7.5% year-on-year growth, with the leading rating agencies placing growth at 6 to 7% and 7 to 8% respectively, supported by infrastructure, industrial and commercial construction segments, and a revival in housing demand.

Three external factors merit close monitoring through the year. First, the trajectory of crude and petroleum coke prices, considering the continuing situation in West Asia, will determine the pace of pricing actions across regions. Second, the actual realisation of the South-West Monsoon against the India Meteorological Departments below-normal projection will influence rural demand in the second half of the year. Third, the evolution of United States tariff policy and the consequent pressure on the rupee will shape the external-sector backdrop and the affordability of imported inputs.

Your Company is well positioned, by virtue of its national scale, geographic diversification, sustained investment in captive renewable energy and waste-heat recovery, and disciplined capital allocation, to deliver profitable growth, enhance shareholder value and reinforce its position in the Indian cement industry.

It is against this backdrop, that we share your Companys performance during FY26.

Business Performance

Production and Capacity Utilisation (Grey Cement) - India

Particulars	FY 2025-26	FY 2024-25	% change
Installed capacity	191.36	183.36	4%
(MTPA)
Production (MMT)	143.83	127.44	13%
Capacity Utilisation	77%	78%	(1%)

MTPA- Million Metric Tonnes Per Annum; MMT- Million Metric Tonnes

Cement production in FY26 was higher by 13%, at 143.83 million tonnes as compared to FY25, capacity utilisation was at 77% as compared to 78%.

Sales Volume

Particulars	FY 2025-26	FY 2024-25	% change
Grey Cement - India	145.52	128.32	13%
Grey Cement - Overseas	6.06	5.51	10%
White Cement	3.17	2.69	18%
Total Sales Volume*	154.25	135.83	14%

*After elimination of inter company sales.

Domestic sales volume registered a growth of 13% in FY26.

Financial Performance

	Standalone	Consolidated
	FY 2025-26	FY 2024-25	FY 2025-26	FY 2024-25
Net Turnover	81,080	70,857	87,384	74,936
Domestic	80,880	70,569	83,128	72,044
Overseas	200	288	4,256	2,893
Other Income (Other Operating Income and Other Income)	1,466	1,731	1,706	1,763
Total Expenditure	66,730	59,599	71,491	63,398
Profit before Interest, Depreciation and Tax (PBIDT)	15,816	12,990	17,598	13,302
Depreciation	4,055	3,739	4,644	4,015
Profit before Interest and Tax (PBIT)	11,761	9,250	12,953	9,287
Exceptional Items [loss / (gain)]	104	88	139	97
Finance Costs	1,630	1,465	1,872	1,651
Profit before Tax Expenses and Share in Profit/(Loss) of Associates and Joint Venture	10,027	7,697	10,943	7,539
Share in Profit/(Loss) of Associates and Joint Venture (net of tax)	-	-	(16)	(11)
Profit before Tax Expenses	10,027	7,697	10,927	7,528
Tax Expenses	2,622	1,504	2,739	1,488
Profit After Tax (PAT)	7,405	6,193	8,188	6,040
Profit Attributable to Non-controlling Interest	-	-	23	1
Profit Attributable to Owner of the Parent	-	-	8,166	6,039

Net Turnover

Your Companys Net Turnover at Rs. 81,080 crore was 14% higher than the previous year led by sales volume growth of 12%.

Other Income

Other income was Rs. 1,466 crore, a decrease of 15% from the previous year mainly on account of lower treasury income.

Operating Profit (PBIDT) and Margin

PBIDT at Rs. 15,816 crore was 22% higher than the previous year. The higher operating margin was attributable to higher sales realisations, lower input costs, and positive operating leverage from higher volume growth.

Cost Highlights

? Energy Cost

Overall energy costs decreased by 7% from Rs. 1,322 /t in FY25 to Rs. 1,229 /t in FY26, mainly due to lower fuel prices and higher green power mix.

Input Material Costs

Input material costs increased by 5% from Rs. 624/t in FY25 to Rs. 653/t in FY26.

Freight and Forwarding Expenses

Freight and forwarding expenses decreased by 4% from Rs. 1,195/t in FY25 to Rs. 1,146/t mainly due to reduction in lead distance.

Employee Costs

Employee costs increased to Rs. 3,659 crore as compared to Rs. 3,299 crore in the previous year, primarily due to annual increments and addition of new capacities.

? Depreciation

At Rs. 4,055 crore, depreciation was higher by Rs. 316 crore on account of capitalisation of new capacities during the year.

Finance Cost

Finance cost increased to Rs. 1,630 crore from Rs. 1,465 crore primarily on account of increase in average borrowings.

Deposits

Your Company does not accept any fixed deposits from the public falling under Section 73 of the Companies Act, 2013 ("the Act") and the Companies (Acceptance of Deposits) Rules, 2014.

Upon effectiveness of the Composite Scheme of Arrangement between Kesoram Industries Limited ("Kesoram") and your Company and their respective shareholders and creditors, fixed deposits of Kesoram had been taken over. During the year, your Company repaid outstanding fixed deposits of Rs. 73.82 crore along with interest upto the due dates.

Credit Rating

Your Company has adequate liquidity and a strong balance sheet. CRISIL and India Ratings and Research reaffirmed their credit rating as CRISIL AAA/Stable and IND AAA/Stable for Long Term and CRISIL A1+ and IND A1+ for Short Term, respectively. Further, CARE Ratings has rated the long-term borrowings as CARE AAA/Stable and short-term borrowings as CARE A1+.

Your Company has also obtained credit rating for its foreign currency bond issuances from Fitch and Moodys and has been rated by them as BBB- and Baa3, respectively, which are equivalent to Indias sovereign ratings.

This is a testament to your Companys sound financial management as well as its ability to service its financial obligations in a timely manner.

Income Tax

Normalised income tax expenses increased mainly on account of an increase in taxable income.

Net Profit

PAT increased by 20% from Rs. 6,193 crore to Rs. 7,405 crore.

Significant changes in key financial ratios, along with detailed explanations

Particulars	FY 2025-26	FY 2024-25	% change
Debtors Turnover (Days)	21	20	3%
Inventory Turnover (Days)	38	43	(11%)
Interest Coverage Ratio	8.3	8.0	5%
Current Ratio	0.89	0.89	(0.0%)
Debt Equity Ratio (Gross)	0.26	0.28	(7%)
Debt Equity Ratio (Net)	0.19	0.22	(14%)
Operating Profit Margin (%)	19.0	17.4	10%
Net Profit Margin (%)	9.1	8.7	5%
Return on Net Worth (%)	10.3	9.6	7%
Return on Capital Employed (%)	11.6	10.8	9%
Earnings Per Share (EPS) (Basic)	251.77	210.52	20%

> Detailed Explanation of Ratios

+ Debtors Turnover (Days) used to quantify a companys effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a company uses and manages the credit it extends to its customers. The ratio is calculated by dividing average trade receivables by average turnover per day.

+ Inventory Turnover (Days) represents the average number of days a company holds its inventory before selling it. It is calculated by dividing average inventory by average turnover per day.

+ Interest Coverage Ratio measures how many times a company can cover its current interest payment with its available earnings. It is calculated by dividing PBIT by finance cost.

+ Current Ratio is a liquidity ratio that measures a

companys ability to pay short-term obligations or those due within one year. It is calculated by dividing the current assets by current liabilities (excluding current borrowings).

+ Debt Equity Ratio is used to evaluate a companys financial leverage. It is a measure of the degree to which a company is financing its operations through debt versus owned funds. It is calculated by dividing a companys total debt by its shareholders equity.

+ Operating Profit Margin (%) is a profitability or performance ratio used to calculate the percentage of profit a company generates from its operations. It is calculated by dividing the PBIDT (excluding Other Income) by turnover.

+ Net Profit Margin (%) is the net income or profit a company generates as a percentage of its revenue.

It is calculated by dividing the profit for the year by the turnover.

+ Return on Net Worth ("RONW") (%) is a measure of profitability of a company expressed as a percentage.

It is calculated by dividing Net Profit from continuing operations for the year by average Net Worth during the year.

+ Return on Capital Employed ("ROCE") (%) measures a companys profitability and the efficiency with which its capital is used. In other words, the ratio measures how well a company is generating profits from its capital. It is calculated by dividing PBIT by average capital employed during the year.

+ Earnings Per Share ("EPS") is the portion of a companys profit allocated to each share. It serves as an indicator of a companys profitability. It is calculated by dividing profit for the year by weighted average number of shares outstanding during the year.

Cash Flow Statement

	FY 2025-26	FY 2024-25
Cash Flows from Operating Activities:
Cash generated from Operations before movement in Working Capital	15,360	12,242
Changes in Working Capital	325	(1,432)
Income Taxes paid (net of refunds)	(1,287)	(1,234)
Net Cash generated from Operating Activities (A)	14,398	9,576
Cash Flows from Investing Activities:
Net Capital Expenditure	(9,523)	(8,900)
(Purchase)/Redemption of Current Investments, Non-Current Fixed Deposits with Bank and Others	(846)	3,267
Investment in Subsidiaries/ Joint Venture and Associates and Other Non-Current Equity Investments	(380)	(10,135)
Proceeds from Sale of Shares in a Subsidiary	789	-
Interest and Dividend Received	145	318
Net Cash used in Investing Activities (B)	(9,815)	(15,450)
Cash Flows from Financing Activities:
Proceeds from Issue of Share Capital on Exercise of ESOS	-	2
Proceeds/ (Purchase) of Treasury Shares (net)	(69)	(69)
Repayment of Current and Non-Current Borrowings (net)	(694)	9,124
Repayment of Lease Liabilities incl. Interest	(241)	(202)
Interest Paid	(1,581)	(1,278)
Dividend Paid	(2,273)	(2,012)
Net Cash (used in) / generated from Financing Activities (C)	(4,858)	5,566
Net Increase in Cash and Cash Equivalents (A+B+C)	(275)	(307)
Cash and Cash Equivalents at the beginning of the year	312	542
Cash and Cash Equivalents transferred from Kesoram	-	77
Cash and Cash Equivalents at the end of the period	37	312

Sources of Cash

Cash Generated from Operations

Cash generated from operations was higher compared to the previous year due to increase in profits on account of higher sales volume, prices and lower costs.

Changes in Working Capital

Decrease in working capital is attributed to decrease in inventories on account of lower fuel inventory and increase in trade payables.

Uses of Cash

Net Capital Expenditure

Your Company spent Rs. 9,523 crore on various capex during the year. These were primarily towards growth and maintenance, capex as well as Waste Heat Recovery Systems.

Investments

Your Company has invested the surplus cash in liquid investments.

Borrowings

During the year, your Company repaid a debt (on a net basis) of Rs. 694 crore.

The loan repayments have been made out of free cash flows that your Company generated during the year. The aforesaid steps have resulted in an improved Net Debt/Equity ratio and Net Debt/EBITDA ratio.

Transfer to General Reserves

The Board of Directors of your Company has decided not to transfer any amount to the General Reserves, for the year ended 31^st March, 2026.

Research and Development

Your Companys research and development ("R&D") function continues to be a key enabler for the strategy to deliver low carbon growth, strengthen product differentiation, and enhance long term business resilience. The R&D agenda is anchored in three priorities: lowering the environmental footprint of cement and concrete; improving operational efficiency; and developing next generation construction materials. In addition to innovation, R&D provides continuous technical and analytical support across operations, enabling informed decision making and performance optimisation. This is supported by a strong in-house scientific base and collaborations with leading academic institutions and global platforms, including participation in the Global Cement and Concrete Association ("GCCA") Innovandi network.

During the year, R&D efforts were focused on reducing clinker intensity and enhancing the utilisation of supplementary cementitious materials ("SCMs") such as fly ash, slag, and limestone. Work on grinding optimisation, including the development of in-house grinding aid formulations and refined particle size distribution strategies, enabled higher clinker substitution while maintaining product performance. At the same time, research on multi-component cementitious systems and concrete formulations improved functional performance, workability, and durability, while supporting lower embodied carbon. These efforts also facilitated greater use of industrial by-products, reinforcing your Companys focus on resource efficiency and circularity.

R&D continued to strengthen your Companys portfolio of blended and composite cements through deeper understanding of clinker-SCM interactions and performance enhancement techniques. Early stage studies were undertaken on alternative binder systems, including alkali activated materials for niche applications such as precast elements and emerging technologies like 3D concrete printing. These initiatives remain at an exploratory stage and will be progressed through structured pilot evaluations based on technical and operational feasibility.

On the operational front, R&D worked closely with process engineering teams to improve energy efficiency, fuel flexibility, and emissions performance. Advanced analytical tools, including Computational Fluid Dynamics ("CFD"), were deployed across multiple units to optimise combustion behaviour, airflow dynamics, and heat transfer efficiency in kiln and calciner systems. These interventions helped address operational challenges such as alternative fuel flow stability and mixing behaviour, contributing to improved combustion efficiency, reduction in specific heat consumption, and higher Thermal Substitution Rates.

Your Company follows a rigorous and structured framework for evaluating product performance, durability, and environmental impact. New formulations are assessed through comprehensive laboratory testing and validated through field trials under varied operating conditions. Durability and long-term performance are evaluated using established methodologies, supported by advanced analytical techniques to ensure consistency and reliability. This approach ensures that sustainability improvements are achieved without compromising product quality, performance, or customer outcomes.

Collaboration remains a key pillar of your Companys R&D strategy. Your Company continues to engage with academic institutions, research organisations, industry bodies, and technology partners to accelerate innovation and adopt emerging best practices. These partnerships support advancements in low carbon cement chemistry, alternative fuels, circular materials, and process optimisation, while also enabling the application of data driven diagnostics and advanced modelling tools to improve operational performance.

Your Company will continue to advance lower clinker cement systems, improve the performance of blended and composite cements, and evaluate future ready binder technologies. Efforts will also focus on enhancing thermal efficiency, increasing the use of alternative fuels, strengthening resource productivity, and expanding the role of data driven process optimisation. Through these initiatives, your Company is reinforcing its ability to deliver sustainable building materials while supporting long term growth and value creation for stakeholders.

Sustainability

Sustainability remains integral to your Companys strategy.

It has been embedded across operations, supply chain and beyond to drive long term value creation. Your Company continues to align with the best global practices, combining operational efficiency with investments in emerging technologies.

Your Company has established clear science-based pathways to decarbonisation - targeting 27% reduction in Scope 1 emission intensity and 69% reduction in Scope 2 emission intensity by 2032, from a 2017 base year (validated by Science Based Targets initiative - SBTi). Further, your Company is progressing towards updated targets aligned to the 1.5?C pathway under the Paris Agreement, currently in advanced stages of validation. These north-star goals along with alignment towards the GCCA Climate Ambition 2050 and Net Zero Concrete Roadmap (India specific by 2070) guide the decarbonisation journey of your Company.

To operationalise these commitments, your Company has institutionalised various initiatives including a revised Internal Price on Carbon. Your Companys Board of Directors has approved a defined shadow price of USD 30 per tC0₂e. This will be applied to all capex decisions across your Company, with all proposals submitted for approvals - standardised to include return on investment calculations with and without the internal price on carbon. This approach allows your Company to assess the environmental impact of projects and capital expenditures and incentivise consideration of climate-related issues in risk assessment and decision making. By assigning a monetary value to each ton of CO2 emissions, your Company can quantify the environmental cost of its business activities. This internal pricing mechanism serves as a valuable tool for transitioning towards a low-carbon economy, influencing strategy and financial planning, driving decarbonisation investments and opportunities, helping reduce emissions in operations, and ensuring preparedness for current and future carbon pricing regulations to manage climate change risks.

Major decarbonisation levers that your Company is driving include targeted focus on:

• Energy Transition - Scaling green power mix through renewable power and waste heat recovery - achieved 35.8% green power substitution in the current year, targeting 85% green power share by 2030 under RE100.

• Energy Efficiency - Delivered on EP100 commitment, doubling energy productivity from the 2010 baseline, significantly ahead of the 2035 target.

• Alternative Fuels and Raw Materials - increasing substitution of fossil fuels with waste-derived alternative fuels and industrial residues.

• Low Carbon Products and Materials - Advancing R&D on low-carbon cement formulations, including new supplementary cementitious materials with ~69% of product portfolio coming in from PPC, PCC and other blended composite cement.

• Next Generation Technologies - Advancing selective investments in breakthrough technologies including Zero Carbon Lime partnership with University of California,

Los Angeles ("UCLA") (with specific testing, equipment selection, sizing, final process parameters lock-in etc. being carried out), Kiln Electrification partnerships with Coolbrook amongst others (to look at specific high temperature applications ~1450-1500 ?C).

During the year, your Company entered into a collaboration agreement with Hindustan Petroleum Corporation Limited ("HPCL") to jointly explore and pilot a first of its kind circularity initiative for used lubricating oils in the Indian cement industry. The initiative will reprocess, used lubricating oils generated from your Companys manufacturing units into high quality re-refined base oil at HPCLs Green R&D Centre in Bengaluru. As a part of the pilot, HPCL will explore development of finished lubricants using re-refined base oil to meet your Companys performance specifications.

Further, as a responsible business, your Company recognises its duty towards nature. Its efforts to promote a circular economy, water management, biodiversity, and low-carbon product stewardship are a testament to this statement. This year, your Company utilised 22.5% recycled input materials in cement production and conserved 143 million cubic meters of water, achieving its 5.8 times water positive target.

Your Company completed biodiversity impact assessments at 24 integrated units and plans to assess all its integrated units by the end of 2028. The Life Cycle Assessment for 4 of its major products has been completed, and their Environmental Product Declaration ("EPD") is publicly available. Additionally, your Company has introduced and maintained a unique Sustainable Supply Chain Program, where all new suppliers and vendors are evaluated for ESG risks before onboarding. Your Company is also assessing its existing Tier 1 suppliers and providing capacity-building sessions to help them embark on their sustainability journey.

As a recognition of its efforts, your Company was presented with the Gold Award at the 3^rd FICCI Sustainable Industrial Practice Awards, in the Large Industry Category. The award recognised organisations that balance environmental stewardship alongside economic growth and social well-being, demonstrating a clear commitment to sustainable industrial practices. Your Companys win reflects its strong sustainability stewardship and performance across its focus areas, aligned with its environmental responsibility strategy across its operations. This recognition reinforces your Companys commitment to sustainable industrial development in India. Your Companys efforts in sustainability, especially towards decarbonisation, green energy and circularity have reaffirmed its leadership in sustainability and operational excellence at the Quality Circle Forum of Indias ("QCFI") 4^th National Environment & Sustainability Awards and Net Zero Conclave 2025. Your Company received the QCFI Excellence Award in the Decarbonisation, Green & RE Excellence Award Category, the events top honour. This recognition is a testament to your Companys commitment to reducing its Scope 1, 2 & 3 emissions, and to being a sectoral leader in achieving the commissioning of more than 1GW of green energy capacity.

Your Company has been distinguished through its inclusion in the S&P Global Sustainability Yearbook, with a strong Corporate Sustainability Assessment ("CSA") score of 71. Your Company stands among an exclusive group, with only four companies in India and twelve globally within the construction materials sector, underscoring its commitment to best-in-class ESG practices.

Your Company continues to make steady progress toward its sustainability commitments through a balanced approach - scaling proven levers while selectively investing in breakthrough technologies. Its focus remains on delivering measurable outcomes, strengthening resilience, and maintaining leadership in sustainable construction materials.

Digitalisation and Innovation

At your Company, digital journey keeps customers and stakeholders at the core of innovation, building a connected, smart and sustainable ecosystem. Teams learn fast and apply the best technologies to deliver at speed and scale. Digitalisation has become a way of working across the organisation, with adoption growing among customers, channel partners, service partners and employees — strengthening convenience, transparency and collaboration across the value chain.

Stakeholder First

Your Company is scaling the shift from digitisation to intelligent automation, embedding Artificial Intelligence ("Al"),

ML ("Machine Learning"), Gen Al, Computer Vision and loT

("Internet of Things") into core processes on a robust Data

Warehouse and Data Lake foundation.

• AI/ML powers complex forecasting, geospatial white-space identification and distribution network optimisation.

• Gen Al tools - your Companys in-house assistant and resolution BOT give frontline sales teams real-time insights and product information for stronger customer conversations.

• An immersive AR/VR training platform is scaling across cities, helping applicators use your Companys products more effectively.

Customer First

Your Companys flagship platforms replace paper-based processes with a seamless interface across products and segments, improving execution discipline and real-time visibility.

• UltraTech Trade Connect, launched in 2020, is now the nerve centre for dealer and retailer operations across Grey Cement, Building Products and Ready-Mix Concrete — also serving as a digital backbone for sales, logistics and commercial teams. Newly added Al capabilities boost dealer engagement; 95%+ active dealer adoption reflects its impact.

• UltraTech Customer Connect gives institutional customers site-level visibility, financial documents and One-click ePOD for material receipt. 80%+ of group customers are onboarded.

Empowering Partners

Eye-To-Track remains critical to last-mile delivery, with 85%+ active trips. This years enhancements to the driver app in the form of digital safety-training verification, refresher reminders, real-time loading alerts and dispatch details have improved safety, turnaround time, partner engagement and compliance.

Empowering Internal Stakeholders

• Logistics Control Tower provides a single version of the truth with real-time insights and exception alerts across logistics and operations. Mobile extension has strengthened sales-logistics-plant collaboration and improved OTIF performance.

• OneCRM delivers a unified, Al-powered view of customer interactions across Lines of Business ("LOBs"), supporting visit planning, lead management and structured cross/ up-selling. A lite version works in low-network areas; rollout is extending from trade to institutional and BPD frontline teams.

• RMC Control Tower, an industry-first, has scaled to 140+ plants across multiple cities - enabling dynamic scheduling, real-time visibility and mobile collaboration across plants, transit mixers, pumps and site teams to lift delivery reliability and on-site execution.

Building a Sustainable Digital Ecosystem

Your Companys solutions deliver business impact while advancing sustainability - cutting paper usage, manual processes and unnecessary movement. With unified information flow across interconnected platforms, your Company continues progressing as a customer-centric, digitally enabled organisation, committed to scaling emerging technologies that create value for all stakeholders.

Human Resources

During the year, your Company continued its strategic focus on nurturing a high-performing, inclusive, and future-ready workforce. A range of new initiatives were introduced to support employee well-being, deepen inclusivity, and accelerate skill development, all of which contribute meaningfully to business growth.

Employee Demography

Your Companys workforce continues to grow in line with its expanding business footprint. At the end of FY26, the total headcount for permanent workforce stood at 28,399. Womens representation in the workforce stood at 1517 accounting for 5.3% of workforce. The workforce profile has become progressively younger, with the average age of the management cadre reducing to 39.6 years.

Gen Y and Gen Z together now account for 65% of the workforce, bringing energy, digital fluency, and fresh perspectives. At the same time, experience continues to be valued, with 8% of employees having served the organisation for over 25 years.

Attracting and Retaining High Quality Talent

At your Company, attracting and retaining high quality talent is not just a hiring priority but a strategic lever that directly shapes leadership depth, succession strength, and long-term competitiveness. Over the years, we have made significant progress in institutionalising a structured and governance led approach to leadership hiring. Through this approach, your Company sharpened its ability to identify, assess, and onboard leaders for crucial roles across the organisation, supported by clearly defined role specifications, candidate personas aligned with stakeholders, and trained assessment panels that evaluate not just capability but long-term potential. This resulted in 48 leadership hires during the year, with over 60% done proactively, nearly half under 45 years of age, and a strong infusion of talent from diverse industries beyond cement. Campus and early career programmes, including the UltraTech Young Leaders Program, the CA Leadership Program, UltraTechie, Udaan, the ABG Leadership Program, and the Engineering Leadership Program, are now anchored through structured tracks, stronger governance, mentorship, and early deployment on meaningful business projects.

Enabling Growth Through Internal Mobility

Your Company prioritises internal talent development by creating pathways for both horizontal and vertical career progression. This approach prepares employees for P&L and Functional leadership roles. A structured assessment process helps identify individuals with high potential to take on larger responsibilities. Focused learning, exposure to key business areas and career mobility ensure that talent within the organisation continues to evolve, strengthening leadership pipeline and driving long-term growth. During the year, 62% of employees experienced growth opportunities through career movement. 76% of key roles in mid management and above were filled through internal movements. And wherever a need was felt to bring in fresh capability, we hired from the market as well. Your Companys approach is to strengthen leadership from within while complementing it with external talent where the business requires new skills and perspectives.

Future-fit Workforce

Your Companys learning ecosystem is built around three integrated pillars - Fit to Work, Fit to Perform, and Fit to Grow, each addressing a distinct capability need and together creating a connected pathway from role readiness to leadership preparedness. Alongside these pillars, your Company is taking steps for its next phase of growth by building capability in digital, Al, sustainability, alternative fuels, environment, and renewables. During the year, learning delivery reflected the scale of this commitment, with over 18,500 employees trained and more than 6.3 lakh learning hours delivered across the organisation, averaging over 34 hours per employee.

Alongside this, your Company also implemented a trade specific competency framework to strengthen skills of workmen across five critical trades. The programme is designed to align trade capabilities with business needs through structured training and phased rollout across units. During the year, 1,674 workmen were trained, achieving 71% coverage of the planned 2,348 participants across 39 units, improving baseline competency and operational readiness.

Performance turnaround of ICEM and Kesoram

During the year, your Company prioritised business performance turnaround of ICEM and the Cement Business of Kesoram through delivery of an integration plan focusing on Capability Building, Way of Working and Policies of your Company. On capability, employees are being embedded into your Companys learning ecosystem to accelerate development and ensure consistent growth opportunities. Ethics and governance foundations were established from the outset, with complete coverage on your Companys Code of Conduct for employees and policy to Prevent and Redress Sexual Harassment at Workplace.

Building an Inclusive and Engaged Culture

Your Company is equally focused on building a strong culture. Culture becomes even more important when an organisation grows fast and becomes more complex. Your Company continued to invest in building an inclusive workplace.

Focused efforts were made to advance gender diversity by enabling more women to enter, grow, and take on larger roles across businesses and locations. Inclusion initiatives such as HERizon, a Women Employee Resource Group, and structured celebrations of diversity helped embed inclusive behaviours into everyday leadership practices.

Holistic Wellness for a Healthier Workforce

During the year, your Company strengthened employee well-being through a focused and holistic approach covering preventive, curative, rehabilitative, and promotive care. Physical well-being was advanced through age-based comprehensive health check-ups that support early diagnosis and regular health monitoring. 82% of the eligible employee cohort across your Company completed their health check-ups. These efforts were complemented by targeted physical and mental well-being awareness sessions, with topics curated using insights from preventive health data.

Emotional well-being continued to be a key focus area. Your Company also sustained the "Every Life Matters" initiative, which promotes open conversations around mental health and encourages employees to seek and offer support without stigma. Financial well-being was further strengthened through financial literacy initiatives and targeted programmes on financial independence for specific cohorts such as women, last-mile employees, and workmen.

Safety

Safety remains a core value and is integral to your Companys commitment to operational excellence and responsible growth. Your Company continues to strengthen its Occupational Health and Safety ("OHS") framework through a combination of robust governance, system standardisation, capability building, and technology-led interventions, with a clear focus on preventing life-critical incidents and progressing towards its Zero Harm objective.

During the year, your Company further strengthened its OHS management system through enhancements in governance, digital integration, and standardisation across plants, mines, and logistics operations. The fatality risk framework was expanded to cover six critical risk areas, with additional focus on road safety and chemical safety. System controls were reinforced through enhanced permit-to-work and management of change processes, supported by digital workflows, equipment tagging, and mandatory safety isolations. Standardisation efforts included the rollout of comprehensive operating procedures, improved checklists, and upgraded personal protective equipment, alongside engineering interventions aimed at improving ventilation, dust control, and occupational health.

Safety performance during the year reflected both progress and areas for continued focus. The Lost Time Injury Frequency Rate improved significantly to 0.09 compared to the previous year, indicating stronger control over workplace risks despite periods of higher operational intensity. Corrective actions and system interventions enabled stabilisation, reflecting a maturing safety culture supported by strong leadership oversight and continuous learning.

Your Company follows a structured and proactive approach to hazard identification and risk management across all operations. The Hazard Identification and Risk Assessment ("HIRA") process is applied to both routine and non-routine activities, supported by job safety assessments, pre-task risk reviews, and standardised work procedures. Risks are evaluated through cross-functional teams using defined criteria, with controls applied in line with the hierarchy of risk mitigation. Employees and contractors are actively encouraged to report unsafe conditions through multiple channels, including toolbox talks, safety committees, contractor engagement platforms, and a dedicated toll-free safety helpline. Initiatives such as the "60 seconds to think" protocol empower frontline teams to pause and prevent unsafe work.

A structured incident investigation framework ensures that all incidents and near misses are systematically analysed using established root cause methodologies. Learnings are disseminated across the organisation through formal communication channels and translated into corrective and preventive actions, including revisions to procedures, engineering improvements, and strengthened controls. Preventive approaches such as walkthrough inspections, hazard identification drives, behaviour-based safety programmes, and multi-tier safety audits further strengthen early detection and risk mitigation across operations.

Your Company continues to place strong emphasis on leadership capability and safety culture transformation. Structured training programmes, including Train-the-Trainer initiatives, behavioural safety interventions, and technology-enabled learning modules, have been deployed to build competency across employees, contractors, and logistics partners. Leadership engagement is reinforced through visible felt leadership practices, regular safety reviews, and integration of safety metrics into performance management systems, fostering accountability and a culture of shared ownership.

Road safety remains a key priority area, given the scale of logistics operations. During the year, your Company strengthened its approach through driver capability building, digital monitoring of driving behaviour, enhanced verification and compliance systems, and expanded defensive driving training programmes. Awareness initiatives and routine health checks further supported safer operations across the logistics value chain.

Technology continues to play a critical role in strengthening safety management. Digital platforms have enhanced real-time reporting of incidents, near misses, and safety observations, while improving tracking and closure of corrective actions. Advanced analytics and dashboards are being leveraged to identify patterns, strengthen root cause analysis, and enable proactive interventions. In addition, virtual reality-based training and digital learning tools have improved capability building for high-risk activities and safety-critical roles.

Your Company also maintains a robust, multi-tier audit and assurance framework, including internal and third-party audits, to evaluate compliance and identify improvement opportunities. Audit outcomes have consistently highlighted the importance of strengthening safety leadership, hazard identification practices, fire and electrical safety management, and asset integrity systems. Identified gaps are systematically tracked and closed, ensuring continuous improvement in safety performance.

Recognition and reinforcement mechanisms play an important role in sustaining positive safety behaviours. Your Company acknowledges safe practices and achievements across employees and contractors through structured recognition programmes, leadership forums, and communication platforms, strengthening engagement and motivation across all levels.

During the year, multiple units received national and international safety recognitions, reflecting strong compliance with global standards and a deeply embedded safety culture across operations. These achievements underscore your Companys continued focus on disciplined execution, leadership commitment, and continuous improvement.

Your Company will continue to strengthen its focus on managing life-critical risks, improving safety performance across high-risk activities, enhancing digital integration, and further embedding a proactive safety culture across its operations and value chain. Through these efforts, your Company remains committed to ensuring the safety and well-being of all employees, contractors, and stakeholders while supporting sustainable and responsible growth.

Business Responsibility and Sustainability Report

Business Responsibility and Sustainability Report forms part of this Integrated and Sustainability Report. Your Company has obtained reasonable assurance on the BRSR Core reporting.

Contract and Arrangement with Related Parties

Related party transactions entered by your Company during the financial year were completely on an arms length basis and in the ordinary course of business. There were no material transactions with any related party as defined under section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions have the prior approval of the Audit Committee of your Company and reviewed by it on a quarterly basis.

The policy on Related Party Transactions, as approved by the Audit Committee and the Board, is available at https://www.ultratechcement.com/content/dam/ ultratechcementwebsite/pdf/policies/policv-on-related- partv-transactions-final.pdf. The details of contracts and arrangements with related parties of your Company for the financial year ended 31^st March, 2026 is provided in Note No. 39 to the standalone financial statements of your Company.

During the year, your Company obtained shareholders approval for entering into material related party transactions as defined under Regulation 23(4) of the Listing Regulations with ICEM for an aggregate value of Rs. 6,347 crore for the FY 2025-26.

Risk Management

The Indian cement industry, a key enabler of national infrastructure development, operates in an environment characterised by evolving market dynamics, regulatory developments and operational complexities. In this context, your Company recognises that a robust and forward looking risk management framework is critical to sustaining long term value creation and resilience.

Governance and Oversight

Your Company has in place a Board level

Risk Management and Sustainability Committee ("RMS Committee") to oversee the risk management process. The RMS Committee discharges, inter alia, the following key responsibilities:

O Framework Oversight

Periodic review of the Enterprise Risk Management ("ERM") Framework to ensure its continued relevance and effectiveness in the context of your Companys operating environment and strategic priorities.

O Risk Assessment

Evaluation of identified risks, including assessment of their potential impact and likelihood.

O Risk Mitigation

Oversight of mitigation strategies and management actions designed to minimise the potential impact or likelihood of identified risks, considering operational controls, compliance mechanisms and the broader business environment.

Risk Classification

For effective oversight and management, identified risks are categorised into the following six broad categories:

O Operational Risks:

Risks arising from day to day operations, including supply chain performance, production efficiency, asset reliability, workplace safety and process execution.

O Strategic Risks

Risks related to your Companys long term direction, including changes in the competitive landscape, market dynamics, macroeconomic conditions and decisions impacting growth, investments and strategic positioning.

O Technology Risks

Risks associated with the performance, reliability and security of technology systems, including system failures, data integrity risks, information security threats, digital capability constraints and disruptions arising from rapid technological developments.

O Environmental, Social and Governance ("ESG") Risks

Risks relating to climate change, natural resource usage, community relations, ethical conduct and governance practices that may influence long term sustainability and stakeholder value.

O Brand and Reputation Risks

Risks that may impact stakeholder trust and perception of your Company, including those arising from operational incidents, product quality concerns, community issues or external events.

O Regulatory Risks

Risks arising from changes in applicable laws, regulations and standards, as well as risks of non compliance with statutory, legal or regulatory requirements relevant to your Companys operations and products.

Risk Review and Prioritisation

The RMS Committee evaluates risks based on an assessment of both their likelihood of occurrence and potential impact. Based on this assessment, risks are prioritised, and the most appropriate risk management strategies are determined and monitored on an ongoing basis.

During the year, your management undertook a comprehensive refresh of the ERM framework, supported by an assessment of the evolving external environment, operating conditions and emerging industry developments. This exercise involved structured engagement with key stakeholders, including the RMS Committee, the Managing Director and members of the senior leadership team.

Key Risks Identified

The principal enterprise-level risks statement along with their Risk category identified as part of the aforesaid review are set out below:

Raw Material Availability, Supply Vulnerability and Cost Volatility
i
Limited availability of key raw materials, supply chain vulnerabilities and volatility in input costs may disrupt production continuity and adversely affect long-term operating costs.	Operational
Health, Safety and Community Well-being across Operations
Health and safety incidents across high-risk operations may result in legal exposure, operational disruptions and adverse reputational impact.	Operational
Skilled Manpower Availability and Contractor Ecosystem Constraints
Shortages of skilled manpower, concentration within the contractor ecosystem and labour- related disruptions may lead to operational instability, project execution delays and compliance related challenges.	Operational

 

Geopolitical Tensions Affecting Operational Continuity
i
Geopolitical tensions, trade disruptions, cross-border conflicts and security-related restrictions may disrupt operations, constrain supply chains, increase input costs and affect workforce mobility across domestic and international operations.	Operational
Succession Health i
The pace and scale of growth may outstrip the availability of a ready leadership talent pool, resulting in pressure on succession pipelines for senior and mission-critical roles.	Strategic
Land Acquisition, Resettlement and Community Acceptance i
Challenges relating to land acquisition, resettlement and community acceptance may delay capacity expansion initiatives and adversely affect the Companys reputation.	Strategic
Evolving Construction Technologies and Shifts in Public Spending Patterns
i
Changes in construction materials, technologies and public spending patterns may reduce cement intensity, influence demand trends and impact long-term value creation.	Strategic
ESG and Sustainability Transition i
Delays in adoption of clean technologies and increasingly stringent sustainability requirements may impede progress towards long-term sustainability objectives and increase operating costs.	ESG
Climate Change Exposure to Operations and ESG Commitments i
The increasing severity of climate-related impacts, including heat stress, extreme rainfall, drought and land degradation, may disrupt operations, affect workforce productivity and delay progress on ESG commitments.	ESG
Water Scarcity Exposure in Project and Operating Sites i
Water scarcity in project and operating locations may disrupt construction activities and operational readiness, increase costs and create community and reputational challenges.	ESG

 

Enterprise-wide Digital and Responsible Al Adoption, Organisational Capability, Execution and Change Readiness i
Sub-optimal digital and artificial intelligence adoption, driven by capability gaps and execution challenges, together with the absence of robust responsible Al governance, may dilute returns on technology investments and erode stakeholder trust.	Technology
Cybersecurity Vulnerabilities and Gen-AI Data Exposure
i
Rapidly evolving cyber threats across IT and OT environments, combined with emerging Gen-AI data exposure risks, may result in security breaches and operational disruptions impacting business continuity.	Technology
Spurious Products, Product Quality and IP Protection i
The presence of spurious or counterfeit products, inconsistent product quality or inadequate protection of intellectual property may adversely affect customer trust, market perception and long-term brand equity.	Brand and Reputation
Evolving Regulatory and Statutory Compliance Obligations i
Changes in mining, environmental, emissions and other statutory regulations may increase compliance risks, delay approvals and create operational and financial constraints.	Regulatory

Your Companys approach to risk management focuses on the systematic identification, assessment and management of risks, including their avoidance, mitigation, transfer or acceptance, as appropriate.

Risk Statement

Risk Category

Internal Control Systems and their Adequacy

Your Company has put in place adequate internal control systems, including internal financial control systems that are commensurate with the size of its operations. Policies and procedures related to internal control systems are designed to ensure sound management of your Companys operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information, and compliance. Clearly defined roles and responsibilities have been institutionalised, and systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Companys operations.

Cautionary Statement

Statements in the Directors Report and the Management Discussion and Analysis describing your Companys objectives, projections, estimates, expectations, or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Companys operations include global and Indian demand-supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in your Companys principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which your Company conducts business, geopolitical tensions, risks related to an economic downturn or recession in India, and other factors such as litigation and labour negotiations. Your Company is not obliged to publicly amend, modify, or revise any forward-looking statements based on any subsequent development, information, or events, or otherwise.