Moneycontrol PRO
Upcoming Webinar:Watch a panel of experts discuss: Challenges of continuously evolving regulation for Cryptocurrency, on 7th July at 3pm. Register Now

Buy Ultratech Cement; target of Rs 4949: Emkay Global Financial

Emkay Global Financial is bullish on Ultratech Cement has recommended buy rating on the stock with a target price of Rs 4949 in its research report dated July 28, 2020.

July 30, 2020 / 06:46 PM IST
  • bselive
  • nselive
Todays L/H

Emkay Global Financial's report on Ultratech Cement

UTCEM’s Q1 results beat estimates, boosted by higher grey cement realization (up 9.2% qoq vs. estimated 6.8%) and lower opex. Consolidated EBITDA came in at Rs20.7bn vs. estimated Rs16.9bn, while EBITDA/ton stood at Rs1,416 vs. estimated Rs1,159. Key positives: 1) 21% yoy fall in fixed costs; 2) Rs22.1bn reduction in net debt, and net debt/EBITDA of 1.44x vs. 1.55x in Q4FY20; 3) 4% yoy/2.4% qoq decline in Opex/ton; and 4) record high EBITDA/ton of Rs1,416 (up 2.8% yoy). Key negative was a 40% yoy decline in white cement segment’s volume and 73% yoy decline in RMC revenues. Management believes that the 10% reduction in overheads is sustainable. The utilization of its plants is at 60-65% vs. 64% in July’19. Capex guidance has been increased to Rs15bn vs. Rs10bn earlier (to be spent on WHRS, etc.) as the outlook has improved.


We raise EBITDA estimates by 30.7%/16.2%/15.9% for FY21/22/23 on higher realization and cost savings. UTCEM will benefit from cost reduction initiatives. Debt reduction will help in improving the balance sheet further. UltraTech remains our preferred large-cap pick with a Buy rating and OW in sector EAP.


For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jul 30, 2020 06:46 pm
ISO 27001 - BSI Assurance Mark