Sharekhan's research report on UltraTech Cement
In Q1FY2021, UltraTech reported strong beat on operational performance, largely driven by reduction in key input costs. Reduction in net debt was aided by reduction in working capital requirements. The company has increased capex for FY2021 by Rs. 500 crore to Rs. 1,500 crore, highlighting confidence in improving demand environment going ahead. Expect rural demand to sustain on back of good monsoon while labourers returning to project sites and the government kickstarting infrastructure investments to aid in revising non-trade demand from Q3FY2021.
Outlook
We maintain Buy on UltraTech Cement (UltraTech) with a revised PT of Rs. 5,000, factoring revision in earnings estimates for FY2021E-FY2022E and marginally revising upwards our valuation multiple.
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