Motilal Oswal's research report on UltraTech Cement
UltraTech Cement (UTCEM)’s 4QFY23 operating performance was in line with consolidated EBITDA at INR33.2b (v/s est. INR33b) and EBITDA/t at INR1,049 (v/s est. INR1,043). Adj. Profit was at INR16.7b (v/s est. INR17.5b). Lower-than-estimated opex/t helped offset lower realization. Cement demand sustains in Apr’23 after a strong 4QFY23 and UTCEM aims to grow 4-5pp above industry in FY24E. Cement prices have remained stable in Apr’23. Expansion plans of UTCEM are on track and phase-2 expansion of 22.6mtpa will be commissioned by 1HFY26E. We largely retain our FY24/FY25 estimates and reiterate our BUY rating on the stock, given its: a) leadership position in the industry (with a market share of ~26% in FY23), b) robust expansion plans without leveraging the balance sheet, and c) structural cost improvement.
Outlook
We value UTCEM at 15.5x FY25E EV/EBITDA to arrive at our revised TP of INR8,600 (implying EV/t of USD200).
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