Emkay's research report on UltraTech Cement
UltraTech Cement’s consolidated EBITDA stood flat YoY/declined 26% QoQ to Rs30.4bn, missing our/consensus estimates by 4%/11%, respectively, mainly due to one-time higher marketing spends which the management expects to normalize going forward. EBITDA/t declined 7% YoY/19% QoQ to Rs951 (Emkay est: Rs1,000). UltraTech is on track to achieve 200mt grey cement capacity (vs 146mt currently) by FY27E (~11% CAGR) at a capex of less than USD75/t. This, will help the company to achieve industry-leading volume growth, despite its large scale and the lower capex/t will boost return ratios. Besides, UltraTech’s Management is targeting sustainable cost reduction of ~Rs300/t by FY27E to de-risk its business.
Outlook
We factor-in consolidated volumes/EBITDA at 11%/18% CAGR over FY24-27E. Given its strong growth/capex plans, pan-India presence, and robust balance sheet, we increase our target EV/E multiple to 20x (vs earlier 18x) and revise our Jun- 25E TP to Rs12,800/share after the quarterly roll over.
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