Dolat Capital recommended accumulate rating on UltraTech Cement with a target price of Rs 4069 in its research report dated May 20, 2020.
Dolat Capital's research report on UltraTech Cement
Revenue and EBITDA broadly in line, however PAT above estimates. UTCEM posted 13.1% YoY de-growth in revenue to Rs107.5 bn due to 15.7% YoY volume decline to 21.4 mt which was partially offset by 3.0% YoY rise (+1.2% QoQ) in realization to Rs5,012/tn. EBITDA/ APAT grew (3.9%)/ 6.5% YoY to Rs24.4 bn/ Rs11.3 bn. We 0.9%/ (-1.3%)/ 2.1% revenue/ EBITDA/ APAT CAGR over FY20-22E led by (-15.1%)/ 20.0% volume growth and (-1.0%)/ 1.0% realization growth in FY21E/ FY22E. We expect EBITDA/tn to marginally cool off to Rs1,004 (FY21E)/ Rs1,078 (FY22E) vs. Rs1,128 (FY20).
Thus, we recommend Accumulate with a TP of Rs4,069 based on 14x (10% discount to 3/5 year averages) consolidated FY22E EV/EBITDA.
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