UltraTech, Trent, PNB Housing, Supreme Industries, Mahindra Lifespace, Mastek Q4 Review: HDFC Securities

HDFC Securities Institutional Equities

UltraTech Cement - Strong, all-around performance

We maintain Buy on UltraTech Cement Ltd. with an unchanged target price of Rs 10,820 (16.5 times Mar-26E consolidated Ebitda). We continue to like UltraTech Cement for its robust growth and margin outlook and balance sheet management.

During Q4 FY24, UltraTech Cement reported all-around performance: volumes rose 11/28% YoY/QoQ and the margin remained flattish and strong at Rs 1173/million tonne. Solid op-lev gains and input cost moderation offset the sharp 5% QoQ net sales realisation decline impact.

Additionally, UltraTech Cement also tightened its balance sheet as its non-cash working capital turned negative, reducing net debt. UltraTech Cement’s capacity is set to increase by 36% (over FY24) to 202 million metric tonne by FY27 end.

We maintain estimates and expect UltraTech Cement to deliver 11% volume compound annual growth rate over FY24-26E with unit Ebitda at Rs 1,308 in FY26E.

Trent - The one that keeps getting away!

Amidst the apparel slowdown, Trent Ltd.remains an anomaly; it continues to surprise positively both on top-line and margins. Standalone revenue grew 53.4% YoY to Rs 31.87 billion (our estimate: Rs 30.14 billion). Zudio continues to anchor this exceptional growth. In Q4, Westside/Zudio added 12/86 stores (net), taking their total store count to 232/545 respectively. Same-store sales growth across all fashion formats stood at more than 10% in Q4.

Its Star format continues to improve its proposition/sales density and scale well (up 30% YoY; growth almost entirely SSSG-led). Gross margin/Ebitdam expanded 449/477 bps to 45.3/15.0%.

We’ve revised our FY25/26 Ebitda estimates by 7/4% to account for better profitability in Zudio. While we can’t fault the business, valuation remains heady and keeps us from being constructive on the name.

Maintain Sell with a revised SOTP-based target price of Rs 3,000/share (includes 45 times FY26 EV/Ebitda for the standalone business).

PNB Housing Finance - All eyes on growth post the investment phase

PNB Housing Finance Ltd.’s Q4 FY24 results were ahead of our estimates due to higher other income and lower provisioning (4 bps). Loan growth witnessed an uptick (+10% YoY), driven by retail loans (+14% YoY). Management has guided for retail loan growth of 17% for FY25, on the back of significant investments in distribution (189 branches added during FY22-FY24), along with a revival in the corporate loan book during H2 FY25.

The incremental investments are skewed towards affordable and emerging segments to drive higher yields, which are under pressure due to the rebalancing of the portfolio towards retail (97% of loan book) and particularly individual housing (~72% of retail).

Throughput from these newly added branches, which are likely to drive opex ratios higher, remain a key monitorable, while the credit costs are likely to remain subdued (sub-30bps), with recoveries from the written-off pool.

We revise our estimates by 8%/6% largely due to higher loan growth and lower credit costs and maintain Add with a revised RI-based target price of Rs 890 (implying 1.3 times Mar-26 adjusted book per share).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.