Buy UltraTech Cement: target of Rs 7200: Sharekhan

Sharekhan's research report on UltraTech Cement

Expect healthy demand-led by pick up in non-trade demand along with sustained pricing discipline to benefit in Q4FY2021. Long-term structural demand intact. Impact of rise in pet coke and diesel prices to be partially felt in Q4FY2021 and fully in Q1FY2022. Higher rail transport to minimise the impact of diesel price rise. The company’s 19.5 mtpa expansion plan at a cost of Rs. 6,527 crore (without affecting de-leveraging plan) to ensure industry outperformance over the next four to five years. We maintain Buy on UltraTech Cement (UltraTech) with a revised PT of Rs. 7,200. Expect healthy demand-led by pick up in non-trade demand along with sustained pricing discipline to benefit in Q4FY2021. Long-term structural demand intact. Impact of rise in pet coke and diesel prices to be partially felt in Q4FY2021 and fully in Q1FY2022. Higher rail transport to minimise the impact of diesel price rise. The company’s 19.5 mtpa expansion plan at a cost of Rs. 6,527 crore (without affecting de-leveraging plan) to ensure industry outperformance over the next four to five years.

Outlook

We maintain Buy on UltraTech Cement (UltraTech) with a revised PT of Rs. 7,200.

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