Accumulate Ultratech Cement; target of Rs 13,425: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Ultratech Cement with a target price of Rs 13,425 in its research report dated October 20, 2025.

Broker Research

October 21, 2025 / 10:49 IST

Accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Ultratech Cement

UltraTech Cement (UTCEM) reported a softer Q2FY26 operating performance despite strong volumes on higher operating costs. Restated volume growth with Kesoram & ICEM in the base, was 7% YoY to 33.85mt (better than PLe 31.8mt). Average grey cement realization improved 0.3% QoQ, driven by a higher share of premium products (37.4%) during a seasonally weak quarter. Operating costs however rose, with RM costs impacted by higher fly ash prices, staff costs increasing due to annual increments and bonuses, and other expenses rising from higher kiln shutdown days, resulting in a cost per ton delta of Rs200/t and EBITDA/t of Rs914 (PLe: Rs1,044). Management expects to recover Rs100/t of these costs from Q3. India Cements (ICEM) and Kesoram delivered EBITDA/t of Rs386 and Rs745, respectively, and are expected to reach ~Rs1,000/t and ~Rs1,200/t by FY28E. Brand conversion of ICEM and Kesoram into UTCEM remains on track for 100% completion by June 2026.

Outlook

We expect UTCEM’s Revenue/EBITDA/PAT to deliver a CAGR of 15%/22%/31% over FY25-28E. The stock is trading at EV of 17.4x/15.9x FY27E/28E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs 13,425 on higher capex assumptions (earlier Rs13,599) valuing at 18x EV of Sep’27E EBITDA.

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