Buy UltraTech Cement; target Rs 1,473: Motilal Oswal

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Buy UltraTech Cement; target Rs 1,473: Motilal Oswal

Motilal Oswal is bullish on UltraTech Cement and has recommended buy rating on the stock with a target price of Rs 1,473 in its October 20, 2011 research report.

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RELATED NEWS Hold Sterlite Technologies; target of Rs 47: Emkay Buy Coromandel Int; target of Rs 359: PINC Research Buy UltraTech Cement; target of Rs 1317: PINC Research ALSO READ See previous views by Motilal Oswal See what other Experts & Brokerages are saying about UltraTechCement See messages about UltraTechCement UltraTechCement BSE | NSE 29/05/12 Are Mutual Funds betting on UltraTechCement?

Motilal Oswal is bullish on UltraTech Cement and has recommended buy rating on the stock with a target price of Rs 1,473 in its October 20, 2011 research report.

"UltraTech Cement's 2QFY12 results are below estimates with EBITDA/ton of INR 622 (v/s est INR 751/ton) and PAT of INR 2.8b (v/s est 3.4b), impacted by lower grey cement realizations (-INR 256/ton QoQ v/s est -INR 240/ton QoQ). Volumes at 9.22mt (flat YoY, -6% QoQ; v/s est 9.34MT). Grey Cement realization's at INR 3,507/ton (-6.8% QoQ and +19% YoY; v/s est INR3,523/ton). Sales grew by 21.6% YoY (-10% QoQ) at INR 39.1b (v/s est INR 38.7b). EBITDA at INR5.82b (v/s est INR7.1b), translating into EBITDA margins of 14.9% (-12.3bp QoQ v/s +220bp YoY v/s est 18.4%) and EBITDA/ton of INR 622 (v/s est INR751/ton), impacted by RM and energy costs. However, higher other income at INR1b (v/s est INR 775m) boosted PAT growth to 141% YoY (-59% QoQ) to INR 2.8b (v/s est INR 3.4b). We maintain our EPS for FY12 at INR 80.9 and FY13 at INR 101.8, as higher recovery in realizations off-sets lower volumes and cost push. The stock trades at 11x FY13E EPS, 6x EV/EBITDA and USD98/ton. Maintain Buy with target price of INR 1,473 (8x FY13 EV/EBITDA)," says Motilal Oswal research report.

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