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Buy UltraTech Cement; target of Rs 6720: HDFC Securities

HDFC Securities is bullish on UltraTech Cement has recommended buy rating on the stock with a target price of Rs 6720 in its research report dated January 25, 2021.

January 28, 2021 / 03:49 PM IST
 
 
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HDFC Securities' research report on UltraTech Cement

UTCEM delivered yet another stellar quarter, as its 3QFY21 consolidated net sales/EBITDA/APAT soared 17/47/98% YoY to Rs 122.5/30.9/15.8bn respectively. It is driven by a robust 14% volume growth (2x industry growth) and superior opex controls (down 4% YoY). Healthy realisation also boosted the gains. The company further lowered its working capital, reducing net debt/EBITDA to 0.9x (vs 1.8x in Mar’20). We continue to like UTCEM for its strong volume focus along with superior margin delivery and working capital controls.

Outlook

We maintain BUY with a higher target price of Rs 6,720/share (16x Dec’22E consolidated EBITDA).