Ultratech Cement is very much in the limelight today morning. The stock, which had closed yesterday at Rs.4892.25, closed higher and soon went on to hit a new high at Rs.5198.30.
The company announced yesterday that it will be increasing its capacity by 12.8 mtpa and this additional capacity will be created in east, central and north India.
This comes at a cost of Rs.5477 crore and will take the overall capacity to 136 mtpa.
The commercial production from new capacities will go on stream by Q4FY23 in a phased manner.
This expansion includes the existing approval for the cement plant at Pali in Rajasthan, in addition to the company's 8.7 mtpa capacity expansion currently underway in Uttar Pradesh, Odisha, Bihar and West Bengal, which has picked up pace and is expected to get commissioned by FY22, in a phased manner.
The company also said that the capacity addition will not impact the ongoing deleveraging program which is on track to make UltraTech debt free by the time the expansion program is completed.
Following this, various brokerage houses have upped their rating on the stock, almost all unanimous in their opinion that this large expansion program will help the grow faster than the industry and improve its profitability considerably.