KR Choksey has given Accumulate recommendation for UltraTech Cement with a target price of Rs. 8128 in its research report issued on Jul 24, 2021

KR Choksey’s research report on UltraTech Cement

Ultratech reported sales growth of 54.2% YoY at INR 1,18,298 mn, mostly in line (0.7% below) with our estimate. However, on QoQ basis revenue declined by 17.9%. Cement sales volume saw a growth of 47% YoY to 21.5 MT against 14.7 MT in Q1FY21, driven by higher utilization, robust demand and low base effect. In Q1FY22 capacity utilization stood at 73% against 46% in Q1FY21. Blended realization improved by 5.4% YoY to INR 5,495/t (vs INR 5,211/t in Q1FY21). EBITDA increased by 59.2% YoY to INR 33,075 mn, while EBITDA margin expanded by 87 bps YoY/ 234 bps QoQ to 28%. EBITDA/t stood at INR 1,536 in Q1FY22, a rise of 8.4% YoY. Reported PAT has seen a growth of 114.4% YoY to INR 17,026 mn, though on QoQ basis PAT saw a decline of 4.1%. PAT margin improved by 404 bps YoY/ 207 bps QoQ to 14.4%.


The stock price of Ultratech has rallied ~10% since our last update and is currently trading at FY22E/FY23E EV/EBITDA of 17.7/16.3x. We are optimistic about the company’s growth prospects and apply an EV/EBITDA multiple of 17.5x to FY23E EBITDA, which yields a target price of INR 8,128 per share (earlier INR 7,415 per share); a potential upside of 8.5% over the CMP. Accordingly, we reiterate an ACCUMULATE rating on the shares of UltraTech Cement Ltd.

Leave a Reply

Your email address will not be published. Required fields are marked *