UltraTech Cement Q3 Results Review - Strong And A Robust Outlook Enhances Optimism: Systematix

Systematix Report

UltraTech Cement Ltd.’s Q3 FY24 revenue/Ebitda/adjusted profit after tax were in line with our expectations. Domestic volumes grew 5% and total volumes grew ~6% YoY to 27.3 million metric tonne, clocking capacity utilisation of 82%.

Net sales realisation, which is one of the best in the industry stood at Rs 6,127/ tonne up 2.1% YoY and QoQ. Consolidated Ebitda came at Rs 32.5 billion, up by 39.3% YoY (27.6% QoQ).

Blended Ebitda/tonne rose a staggering 31.9% YoY to Rs. 1,191 led by continual reduction in power and fuel expenses.

Trade Volumes improved to 64% of rural sales. Blended fuel consumption of ~$ 150/ tonne compared to $ 162/ tonne in Q2 FY24. The share of blended cement stood at 70%.

UltraTech is looking to complete phase II of capacity expansion by mid-FY26E. Also, phase III of expansion has been announced to bring the capacity to ~200 million tonnes per annum.

We forecast a strong 12%/21%/30% compound annual growth rate in revenue/Ebitda/PAT over FY23-26E on the back of a 12% CAGR in grey cement sales volume combined with more headroom for cost optimisation.

We raise our target price marginally upwards to Rs 12,000 from earlier Rs 11,937 based on the enterprise value/Ebitda multiple to 18 times on the back of robust performance on all fronts.

We maintain 'Buy' on the stock.

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