Motilal Oswal's research report on UltraTech Cement
UTCEM reported an 8%/7% YoY growth in volume/blended realization. EBITDA margin declined by 339bp YoY to 22.6% due to energy cost inflation, which was further accentuated by higher maintenance and employee costs. EBITDA remained largely flat YoY at INR27.1b (-18% QoQ). Market share gains should continue, aided by the ongoing 20mtpa expansion program (1.2mtpa commissioned in Oct'21), which should drive a 10% volume CAGR over FY21-24E. We largely maintain our FY22-24E EPS estimates and expect 19% EPS CAGR over FY21-24E.
The stock trades at 14.9x/12.6x FY23E/FY24E EV/EBITDA (v/s its 10-year average one-year forward EV/EBITDA of 14.3x). We value UTCEM at 16x Sep'23E EV/EBITDA to arrive at our TP of INR8,700. We reiterate our Buy rating.