Buy UltraTech Cement; target of Rs 13,900: Motilal Oswal

Buy

Motilal Oswal's research report on UltraTech Cement

UltraTech Cement (UTCEM)’s 4QFY25 performance was in line with our estimates. EBITDA increased ~12% YoY to INR46.2b, while EBITDA/t declined 4% YoY to INR1,126 (est. INR1,104). OPM was flat YoY at ~20%. Adj. PAT increased ~8% YoY to INR24.9b (in line). Management highlighted that there was some demand weakness at the beginning of FY26 due to heatwaves; however, demand is likely to improve going forward. Sustainable volume growth for the industry should be 7-8%, and UTCEM’s FY26 volume growth on a like-to-like basis should be in double digits. It has achieved cost savings of INR86/t in FY25, and it aims to achieve further cost savings of ~INR214/t by FY27. Net debt/EBITDA was 1.2x and debt should start reducing rapidly. UTCEM has a comfortable net debt/EBITDA of 0.5x.

Outlook

We maintain our earnings estimates for FY26/FY27. The stock trades at 21x/ 17x FY26E/FY27E EV/EBITDA. We value UTCEM at 20x FY27E EV/EBITDA to arrive at our TP of INR13,900. Reiterate BUY.

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UltraTech Cement - 29042025 - moti