Ultratech Cement Q2: Brokerages cheer price hikes, fall in energy cost; raise targets

For the quarter ended September, Ultratech's operating EBITDA/tonne came in at Rs 955, up 17.6 percent YoY. Operating margin came in at 15.95 percent versus 13.43 percent in the year-ago period.

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26 Aug, 2025 12:21

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Brokerages raised their target prices on Ultratech Cement following a strong September quarter showing by the Aditya Biral Group company. Price hikes across the country and reduced costs will drive the earnings, they said.

On October 20, UltraTech Cement reported a net profit of Rs 1,280 crore, up 68.8 percent year-on-year (YoY), driven by increased demand and an uptick in government spending.

“Ultratech achieved capacity utilisation of 75 percent during the quarter on expanded capacity. Energy cost was lower by 10 percent YoY, while raw material cost rose 4 percent on account of increase in cost of flyash and slag,” the company said in a statement.

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Brokerages bullish

CLSA has upgraded Ultratech to an "outperform" rating with a target price of Rs 9,450 a share. Capacity additions remain on track, with the possibility of a third phase announcement by December, the foreign broking firm said. It has forecast 11 percent three-year volume CAGR and an FY26 EBITDA/tonne of Rs 1,300.

The company's operating EBITDA/tonne in Q2 was at Rs 955, up 17.6 percent YoY. Operating margin came in at 15.95 percent against 13.43 percent in the year-ago period.

HSBC has stuck to its “buy” call with a target price of Rs 9,300.

"Recent price hikes and reduced fuel costs will contribute to margin expansion in the second half of the year. We also anticipate further margin growth due to fixed cost absorption," the brokerage said.

In a post-earnings call, Ultratech management said in September and October, the industry raised prices in most of the regions. Spot average price was 5-7 percent higher compared to June. Prices were holding on in most of the markets for now.

Also Read: UltraTech Cement Q2 net profit up 68.8% YoY on increased demand, govt's infra spend

Jefferies said the monsoon intensity in the south, winter in the north and assembly elections could drive prices after mid-November. It has factored in 3-3.5 percent QoQ price increase for Q3 estimates and has a “buy” rating on the stock with the target price of Rs 9,700, up from Rs 9,350.

Nuvama Institutional Equities, too, has revised FY24/25E EBITDA by a percent. "The recent round of price hikes is a positive given concerns about
intensifying competition in the industry. We maintain Hold with a revised target of Rs 8,363 versus Rs 8,276 earlier," it said in a report.

Capex on track

UltraTech said its expansion programme on schedule. The company has commissioned 5.5 mtpa capacity, so far, in FY24 against a total of 12.4 mtpa in FY23.

Its grey cement manufacturing capacity in India is now at 132.45 mtpa.

“Work on the second phase of growth of 22.6 mtpa is in full swing. As part of this project, we are adding another 1.8 mtpa of slag grinding capacity, taking phase 2 to 24.4 mtpa. Commercial production from all these new capacities is expected to go on stream in a phased manner by FY25/FY26,” the company said.

At 10.04 am, the stock was quoting at Rs 8,493.25 on the NSE, 0.30 percent down from the previous close.

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