Buy UltraTech Cement; target of Rs 14460: Motilal Oswal

Motilal Oswal is bullish on UltraTech Cement has recommended buy rating on the stock with a target price of Rs 14460 in its research report dated October 18, 2025.

Broker Research

October 24, 2025 / 11:43 IST

BUY

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on UltraTech Cement

UltraTech Cement’s (UTCEM) 2QFY26 earnings were in line with our estimates. EBITDA grew ~53% YoY to INR30.9b. EBITDA/t increased ~32% YoY to INR914 (estimated INR951). OPM expanded 3.3pp YoY to ~16% (vs. our estimate of ~17%). PAT increased ~75% YoY to INR12.3b. Management indicated a positive demand outlook, supported by GST 2.0, rural market, urban real estate, steady infrastructure projects, and private capex. Brand transition is progressing well with India Cements at ~31% and Kesoram at ~55%. The full conversion is expected by Jun’26. Additionally, the company has announced Phase IV expansion with 22.8mtpa capacity in the northern and western regions. Upon completion of these expansions, its clinker capacity will reach 148mtpa, with a clinker conversion ratio of ~1.6x (currently 1.48x), as it is focusing on increasing blended cement.

Outlook

We estimate its consolidated volume CAGR at ~11% and EBITDA/t of INR1,090/INR1,206/INR1,260 in FY26/FY27/FY28E vs. INR924 in FY25. UTCEM’s improved earnings, return ratios, and low-cost expansions warrant a higher valuation multiple. We value UTCEM at 20x Sep’27E EV/EBITDA to arrive at our TP of INR14,460. Reiterate BUY.

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