Prabhudas Lilladher has given Accumulate recommendation for Ultratech Cement with a target price of Rs. 7180 in its research report issued on May 02, 2022

Prabhudas Lilladher’s research report on Ultratech Cement

UTCEM reported Q4FY22 earnings marginally above our estimates on back of better than expected realisations. EBITDA/t fell 16% YoY to Rs1,138 (PLe: Rs1,080). Street attributes the slide in margins over last couple of quarters to abnormal increase in costs and erratic recovery in prices coupled with demand impacted by unseasonal rains, sand shortage, etc. However, we believe that scope for improvement in margins is very limited as sector is generating strong cash flows with continuous capacity addition. We continue to like UTCEM given its market leading position (20%+ market share), strong B/S (Net debt/EBITDA at 0.5x) and efficient operations.

Outlook

Maintain ACCUMULATE rating with TP of Rs7,180, EV/EBITDA of 15.0x FY24e.

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