UltraTech Cement shares surge following investor call, brokerages maintain bullishness

Over the past 12 months, shares of UltraTech Cement have gained around 3.5 percent in trade.

Aditya Birla Group's flagship firm UltraTech Cement shares were the top gainer on the Nifty 50 index despite a sour market sentiment, as brokerages and experts digested the updates shared in UltraTech Cement's latest investor call.

In the investor call, the cement major shared its reasoning and rationale behind its foray into the cables and wires (C&W) segment. The company aims to expand its consumer reach and has identified C&W as a strategic fit, given its immediate adjacencies to the existing core construction value chain. At the same time, the company continues to strengthen its leadership position in cement through both organic and inorganic expansions beyond FY27.

At 10.40 am,  UltraTech Cement stock was up 2 percent on the NSE to quote Rs 10,336 per share.

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Domestic brokerage Nuvama Institutional Equities said, "UltraTech Cement, at its investor call, impressed upon a well thought-out strategy of foraying into C&W, optimum utilisation of C&W facility by FY31E, along with industry-level operating margin by  FY31E, initially low due to A&P and minimal working capital." The brokerage maintained its buy call.

Further, Motilal Oswal also reiterated its buy rating on the stock, with a price target of Rs 13,700 per share.

UltraTech Cement plans no additional capex in C&W in the near future as it believes current
capacity shall suffice till FY31. At maturity (FY31), the company expects a 5–7x asset turn with wires and cables mix of 60 percent and 40 percent, respectively.

The company expects to leverage its relationships with contractors (being a cement market leader with a 28 percent share) for the new vertical. Moreover, the UBS (Ultratech Building Solutions) network, B2B relationships, access to end users and influencers and their reach shall further extend its reach.

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