UltraTech Cement Q3 Results Review - Profitability To Improve; Expansion To Support Growth: Dolat Capital

Dolat Capital Report

UltraTech Cement Ltd. reported results in line, however Ebitda/tonne and adjusted profit after tax marginally above estimates.

UltraTech Cement posted +7.9% YoY growth in revenue to Rs 167.4 billion led by +5.6% YoY in volume to 27.3 million tonne (+2.4% QoQ) and +2.1% YoY in realisation/tn to Rs 6,127 (+2.1% QoQ).

Ebitda/ adjusted profit after tax up by 39.3%/ 67.9% YoY to Rs 32.5 billion/ Rs 17.8 billion led by better operating performance.

We expect 11.0%/ 20.4%/ 29.6% revenue/ Ebitda/ APAT compound annual growth rate over FY23-26E led by 10.6%/ 10.0%/ 10.3% volume growth and 0.8%/ 1.2%/ 0.0% realisation growth in FY24E/ FY25E/ FY26E.

We decrease Ebitda estimates by 5.2% for FY24E factoring nine months-FY24, however increase by 4.9%/ 5.1% for FY25E/ FY26E factoring higher realization for FY25E (though 0% growth from H2 FY24)/ FY26E.

We downgrade from 'Buy' to 'Accumulate' e with a revised target price of Rs 10,813 based on 16 times consolidated FY26E enterprise value/Ebitda.

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