The Aditya Birla Group is known for financial prudence. Leverage management at UltraTech is part of the core strategy without in any way compromising growth and business leadership. The foundation of our leverage strategy is to have an efficient capital structure suitable for our industry and to maintain a leadership position. We create efficiency by selective and strategic implementation of projects supported by thoughtful leverage.
Our chairman's philosophy of 'Last man standing, first man forward' is our DNA. So, we work in a way that renders our cost structure very efficient. Consequently, during the downtrend in the economy, we are the last man standing. When the growth cycle starts, our better leverage and cost efficiency enables us to be the first man forward.
We decide leverage based on capital structure, debt servicing and investor requirement, and then arrive at an optimum ratio. One of the cornerstones of our strategy is to maintain the top credit rating for both long-term and short-term debt to ensure that we attract the best proposals from lending agencies at fine pricing levels. Our leverage strategy is applicable not only to borrowings but encompasses treasury, working capital management, including inventory and receivable as well as project management.
Once we decide the quantum of borrowing, based on a number of factors, we opt between rupee or overseas borrowing or international bonds. While we evaluate foreign currency borrowing, we consider the fully hedged cost for decision making. This approach eliminates foreign-exchange losses as is the case with many Indian companies.