Buy UltraTech Cement; target of Rs 14,700: Emkay Global Financial

Emkay Global Financial is bullish on UltraTech Cement has recommended buy rating on the stock with a target price of Rs 14,700 in its research report dated September 01, 2025.

Broker Research

September 02, 2025 / 14:14 IST

buy

26 Aug, 2025 12:21

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Emkay Global Financial' research report on UltraTech Cement

We maintain BUY on UltraTech Cement (UTCEM) with TP of Rs14,700. KTAs from our analysis of UTCEM’s FY25 Annual Report: 1) Despite the weak pricing scenario (~7% YoY sharp decline in gray cement realization) in FY25, UTCEM posted a resilient EBITDA margin of ~16.5% (~18% in FY24) and EBITDA/t of Rs960 (Rs1,090 YoY). 2) It added 43mtpa (~30% of FY24 capacity base) in FY25, and is on track to surpass total capacity of 210mtpa by FY27, hence logging a strong ~70-75mtpa lead over Ambuja Cements (consol). 3) Leverage (FY25 net debt-to-EBITDA: 1.4x) in check despite heavy capex. We expect UTCEM to turn net cash by FY27E on the back of healthy cash flow generation and controlled capex. We maintain a positive stance on UTCEM (our top sector-pick) led by 1) healthy pricing environment in FY26TD, 2) visible turnaround in India Cements coupled with a strong EBITDA/t (Rs800 by FY27) guidance, 3) commitment to deliver >Rs300/t (already achieved Rs86/t in FY25) operational cost rationalization.

Outlook

We believe the likely GST rate-cut could accelerate market share gains in the medium term. We value UTCEM at 19x Jun-28E EV/EBITDA with TP of Rs14,700.

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