UltraTech Cement shares gain after CLSA upgrades stock to buy; Citi, Credit Suisse retains outperform rating

CLSA has upgraded the stock to buy from outperform with target of Rs 5000 per share. Citi has maintained a buy on the stock with target of Rs 5000 per share while Credit Suisse has also maintained its outperform call on the stock with target of Rs 4,800 per share.

July 29, 2020 / 10:10 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

UltraTech Cement share price was up 2 percent in the morning trade on July 29, a day after the company declared its June quarter numbers.

The Aditya Birla Group company reported a 37.8 percent year-on-year decline in consolidated profit due to one-time loss and lockdown impact on revenue but managed to beat analysts' estimates which was pegged at Rs 480 crore for the quarter.

Consolidated revenue from operations fell 33.2 percent to Rs 7,633.8 crore compared to the year-ago period as sales volume plunged 22 percent to 14.65 million tonnes, hit by lockdown, but was ahead of the average of estimates of analysts polled by CNBC-TV18 which was pegged at Rs 7,450 crore for the quarter.

At the operating level, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 29.7 percent year-on-year to Rs 2,074.6 crore in Q1 FY21, but margin expanded to 27.2 percent during June quarter 2020 against 25.8 percent in June quarter 2019 due to cost control measures. Both came in ahead of CNBC-TV18 poll estimates of Rs 1,625 crore and 21.8 percent respectively for the quarter.

The stock price has gained over 11 percent in the last 3 days and was trading at Rs 4,209.05, up Rs 73.35, or 1.77 percent at 09:38 hours. It has touched an intraday high of Rs 4,285.60 and an intraday low of Rs 4,150.

Close

Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in is of the view that the stock appears to have registered a consolidation breakout after moving in a sideways zone of Rs 3955 – 3735 levels for a period of 41 sessions.

As this breakout is on the back of relatively much higher volumes, one can safely presume that this counter has embarked on a near-term uptrend with initial targets of Rs 4385 levels.

Global research firm CLSA has upgraded the stock to buy from outperform with target of Rs 5000 per share. The firm sees UltraTech's risk-reward as most attractive in the sector and has raised FY21-23 EBITDA estimates by 10-13 percent, according to a report by CNBC-TV18.

Citi has maintained a buy on the stock with target of Rs 5000 per share and has the stock as the top pick in the cement space. Credit Suisse has maintained its outperform call on the stock with target of Rs 4,800 per share. It has revised FY21-22 EBITDA estimates by 5 percent and 3 percent and EPS by 22 percent and 12 percent respectively.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandip Das
first published: Jul 29, 2020 10:10 am

stay updated

Get Daily News on your Browser
Sections