Buy UltraTech Cement; target of Rs 10,110 HDFC Securities

HDFC Securities' research report on UltraTech Cement

We continue to like UTCEM for its robust growth and margin outlook and balance sheet management. It delivered industry-leading 16% YoY volume growth YoY. NSR rose 1% QoQ. Opex rose 3% QoQ on op-lev loss and higher employee/maintenance costs. Unit EBITDA, thus, declined by INR 62 per MT QoQ to INR 956 per MT. Cool-off in fuel and freight costs cushioned the margin decline QoQ. The company noted that Q3 realisation has gone up 5% QoQ and expects further fuel cost reduction in Q3. It is also bolstering its green power capability, reducing its clinker factor. Its phase-2 expansion of ~24.4mn MT is on track for commissioning during FY25/26E.

Outlook

We maintain BUY on UltraTech (UTCEM) with an unchanged target price of INR 10,110 (16.5x Sep-25E consolidated EBITDA).