UltraTech Cement - Motilal Oswal Reiterates 'Buy' On The Stock, Sees 20% Upside — Here's Why

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Motilal Oswal Report

UltraTech Cement Ltd. is anticipated to benefit from its increasing scale of operations, cost-saving strategies, low capex cost/tonne, and strong cash flow generation. In this note, we highlight the company’s strategy of ‘build, leverage, and build again’.

UltraTech Cement has successfully built capacity (capacity CAGR stood at ~10% over FY15-24 versus the industry CAGR of ~5%), leveraged this capacity through higher utilization (average of ~76% over FY15-24 versus industry average at ~67%), and generated strong cash flows.

Currently, UltraTech Cement is in the process of rebuilding its capacity and balancing its market presence to maintain its position as the industry’s largest player, while also capitalizing on India’s next growth cycle.

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