Sharekhan recommended Hold rating on UltraTech Cement with a target price of Rs 4065 in its research report dated December 14, 2018.
Sharekhan's research report on UltraTech Cement
BCL's acquisition at $100/tonne post Brownfield expansion is likely to be earnings dilutive in the initial years, given significantly lower profitability and higher interest burden. Key risk to our rating is the downward revision of GST rate for cement from 28%. The stability in petcoke prices could help improvement in profitability.
We downgrade UltraTech Cement to Hold (from Buy) with unchanged PT of Rs. 4,065, given the recent run-up of 11% in the stock price along with uncertainties regarding profitability ramp-up of recently acquired Binani Cement Limited (BCL).
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