HDFC Securities' research report on UltraTech Cement
During 2QFY21, UTCEM reported solid earnings beat, driven by strong cost controls, healthy realisation and strong retail demand. Consolidated net sales/ EBITDA/APAT surged 8/41/113% YoY to Rs 103.54/26.95/12.34bn respectively. Working capital reduction and lower Capex further drove a 42% YoY fall in net debt. Management has guided that non-trade demand is recovering well, which should boost sales hereon. Continued cost controls should further support UTCEM’s strong margins.
Outlook
In line with our view, UTCEM continues to deliver margin expansion, asset sweating, and debt reduction. We maintain BUY with a higher Target Price of Rs 5,670/share (15x Sep’22E consolidated EBITDA).
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