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Buy UltraTech Cement; target of Rs 8550: ICICI Direct

ICICI Direct is bullish on UltraTech Cement recommended buy rating on the stock with a target price of Rs 8550 in its research report dated December 29, 2021.

December 29, 2021 / 11:36 AM IST
 
 
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ICICI Direct's research report on UltraTech Cement


We expect UltraTech Cement (UTCEM) to continue to post industry leading growth and profitability over FY21-24E backed by low-cost brownfield expansions and increased cost efficiencies. Its diversified pan-India market mix, premium brand positioning, strong distribution network and large presence in non-trade segment allow it to wither current demand uncertainties much better than peers. Cost saving initiatives may result in Rs100/te benefits (our estimate) by FY24E, and RoCE (post-tax) may expand by >400bps over FY22-24E to ~17%. Dividend payout ratio has increased from 10% in FY20 to 20% in FY21 which may rise further as UTCEM is likely to generate Rs200bn FCF over FY21-24E.



Outlook


Maintain BUY with an unchanged target price of Rs8,850/sh (15x Dec’23E EV/E). UTCEM remains our top pick.

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For all recommendations report, click here


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first published: Dec 29, 2021 11:36 am
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