Buy UltraTech Cement target of Rs 5000: Sharekhan

Sharekhan's research report on UltraTech Cement

Pan-India cement prices have fallen 3.1% q-o-q in Q3FY2020 (till date), although they are up 5.8% y-o-y as against -1.3% to +2.4% price variations seen in Q3 of the past five years. Sales volumes may get hit in Q3FY2020 due to weak government infrastructure spend, state elections, uncertainties arising due to change of state government and construction ban in Delhi-NCR. Higher cement prices and declining costs of key inputs costs to lend support in the wake of weak demand for Q3FY2020.

Outlook

We reiterate our Buy rating on UltraTech with an unchanged PT of Rs. 5,000, as we view recent correction in stock price owing to demand headwinds as an opportunity to invest, with structural growth triggers staying intact.