ICICI Direct is bullish on UltraTech Cement has recommended buy rating on the stock with a target price of Rs 5300 in its research report dated April 26, 2019
ICICI Direct's research report on UltraTech Cement
UltraTech Cement’s revenues for Q4FY19 grew 16.6% Rs 10,500 crore (vs. I-direct estimate of Rs 10,095 crore) almost entirely led by volume growth. Volume sales clocked during the quarter were at 20.46 MT (vs. I-direct estimate of 19.4 MT) whereas realisations remained flat YoY at Rs 5134/t. EBITDA margins were upbeat, expanding 216 bps YoY to 21.1% (vs. I-direct estimate of 17.3%). The strong operational performance drove the margin expansion with production costs per tonne reducing from Rs 4138/t to Rs 4050/t. Consequently, EBITDA/t for the quarter was at Rs 1082/t, up 12.1% YoY. EBITDA for Q4FY19 was at Rs 2213 crore (vs. I-direct estimate of Rs 1750.4 crore). PAT for the quarter grew 108% YoY to Rs 1017 crore on account of a strong operational performance and partly due to a low base.
Hence, we remain positive on the stock with a revised target price of Rs 5300/share (valuing at 15.0x FY21E EV/EBITDA).
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