Moneycontrol PRO

Buy UltraTech Cement; target of Rs 5053: Dolat Capital

Dolat Capital is bullish on UltraTech Cement has recommended buy rating on the stock with a target price of Rs 5053 in its research report dated July 28, 2020.

July 30, 2020 / 06:49 PM IST
  • bselive
  • nselive
Todays L/H

Dolat Capital's research report on UltraTech Cement

Revenue was in line, however EBITDA, EBITDA/tn and APAT above estimates. UTCEM posted 33.1% YoY de-growth in revenue to Rs76.3 bn due to 31.4% YoY volume decline to 14.7 mt coupled with 2.4% YoY decline (+4.0% QoQ) in realization to Rs5,211/tn. EBITDA/ APAT down 29.7%/ 25.5% YoY to Rs20.7 bn/ Rs9.5 bn. We expect 2.2%/ 5.2%/ 12.8% revenue/ EBITDA/ APAT CAGR over FY20-22E led by -10.9%/ 15.0% volume growth and 1.0%/ 1.0% realization growth in FY21E/ FY22E. We increase our revenue estimates by 7.0%/ 2.5% for FY21E/ FY22E. We increase our EBITDA margin estimates by 315/ 225 bps to 23.0%/ 23.3% for FY21E/ FY22E to factor Q1FY21 results. Accordingly, upgrade our APAT estimates by 55.6%/ 22.1% for FY21E/ FY22E. UTCEM will continue to witness healthy operating cash flow (average Rs74.0 bn/year) and free cash flow (average Rs53.0 bn/year) leading to further deleveraging (Net D:E of 0.19x in FY22E vs. 0.42x FY20).


UTCEM, being the largest player in Indian cement industry is its biggest advantage. Thus, we upgrade to Buy with a TP of Rs5,053 based on 15x (8% discount to 3-5 year averages) consolidated FY22E EV/EBITDA.

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 06:49 pm