Buy UltraTech Cement; target of Rs 15,000: Motilal Oswal

Motilal Oswal is bullish on UltraTech Cement recommended buy rating on the stock with a target price of Rs 15,000 in its research report dated February 26, 2026.

Broker Research

February 27, 2026 / 10:12 IST

Buy

Motilal Oswal's research report on UltraTech Cement

UltraTech Cement (UTCEM) has consistently outpaced industry growth led by organic expansion and strategic acquisitions, increasing its market share from ~16% in FY14-15 to ~28% in FY25 (~29% in 9MFY26). The company is executing a multi-phase capacity addition plan to raise domestic grey cement capacity to 235.4mtpa by FY28 vs. 191.4mtpa currently. It contributed ~38% of the industry’s capacity additions during FY23-25 and is likely to add ~28% of incremental industry capacity (as announced so far) during FY26-28. We estimate the company’s market share to increase to ~32% by FY28E. Integration of acquired assets (Kesoram and ICEM) is progressing well, with meaningful brand transition and operational restructuring underway. Also, the structured cost-optimization initiatives – including reduction in lead distance, improvement in clinker conversion ratio, and rising green power share – are expected to deliver cumulative savings of INR300–350/t over the medium term (INR86/t achieved in FY25; ~INR100/t targeted in FY26E).

Outlook

We estimate a consolidated revenue/EBITDA/PAT CAGR of ~12%/18%/22% over FY26-28, aided by ~10% volume CAGR and ~2pp OPM expansion to ~21% by FY28. Profitability improvement and disciplined capex should lift the RoE/ RoCE to ~14%/~13% by FY28 (vs. ~11%/~10% in FY26E). Earnings trajectory is bolstered by capacity ramp-up, cost efficiencies, and a strong demand environment due to the recovery in infra and housing. We value UTCEM at 19x FY28E EV/EBITDA to arrive at our TP of INR15,000. Reiterate BUY.

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