UltraTech Cement (UTCEM)’s 1QFY26 earnings were in line with our estimates. EBITDA grew ~46% YoY to INR44.1b. EBITDA/t increased ~33% YoY to INR1,197 (estimated INR1,186). OPM surged 4.7pp YoY to ~21%. Adj. PAT increased ~44% YoY to INR22.5b. Management highlighted that healthy demand momentum was driven by a pickup in government-led infrastructure projects. It expects a pickup in rural markets, and urban housing is likely to fuel cement demand over the next few quarters. UTCEM guided a double-digit volume growth in FY26. Further, the integration of acquired assets (ICEM and Kesoram) is progressing well, with more focus on efficiency and productivity improvement. Management reiterated its long-term growth outlook driven by operational efficiency, capacity expansions, and maintenance of a strong balance sheet. We broadly retain our earnings estimates for FY26/FY27.
OutlookWe also introduce our FY28 estimates with this note. The stock trades at 22x/18x FY26E/FY27E EV/EBITDA. We value UTCEM at 20x Jun’27E EV/EBITDA to arrive at our TP of INR14,600. Reiterate BUY.
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