Centrum is bullish on Ultratech Cement has recommended buy rating on the stock with a target price of Rs 4740 in its research report dated July 19, 2018.
Centrum's research report on Ultratech Cement
UltraTech’s (UTCEM) Q1FY19 standalone EBITDA rose a modest 4% YoY, as weak pricing amid elevated cost inflation moderated the positives of 33% YoY volume growth (core volume up ~7.5% YoY). Continued improvement in energy consumption metrics and lead distance reduction partly moderated the impact of rising energy costs YoY. Amid a good demand outlook, we expect UTCEM to deliver an industry leading 14% volume CAGR during FY18-20E.
We also expect UTCEM’s margins to benefit from better pricing (H2FY19 onwards), UTCEM’s rising economies of scale and prudent cost controls. We reiterate BUY with a revised TP of Rs4,740.
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