UltraTech Cement Retains Analysts' Support After Q4 Profit Beat

UltraTech Cement Ltd. reported strong earnings in the fourth quarter of fiscal 2024, despite the quarter's sequential price weakness.

The cement manufacturer's net profit soared 35.23% year-on-year to Rs 2,258.58 crore in the quarter ended March, according to an exchange filing on Monday. Analysts tracked by Bloomberg had estimated a profit of Rs 2,122.7 crore.

• Revenue up 9.41% at Rs 20,418.9 crore. (Bloomberg estimate: Rs 20,084.3 crore).

• Ebitda up 23.81% to Rs 4,113.88 crore. (Estimate: Rs 3,815.2 crore).

• Margin at 20.14% vs 17.8% (Bloomberg estimate: 19%).

• Net profit up 35.23% at Rs 2,258.58 crore. (Bloomberg estimate: Rs 2,122.7 crore).

• Sales volume up 11% at 35.08 million tonne.

• Domestic operating Ebitda per million tonne at Rs 1,185, Rs 125 per million tonne higher.

• The company expects some slowdown in demand in H1FY25 due to upcoming elections but does not expect it to be long-drawn.

• Guides high single-digit volumes for FY25- in the range of 7-9%.

• Expect a stable pricing environment during FY25.

• The company sees sparks of pricing improvement in the Maharashtra, eastern, and southern corridors in Q1 FY25.

• Expect to reduce total costs by Rs 200–300 per tonne over FY24-27.

• 3-year capex guidance of Rs 10,000–11,000 crore annually.

• The plan guides Rs 1,500–2,000 crore of net debt by FY25 end; this includes Kesoram Industries' debt.

• Expect the Kesoram deal to be completed by the end of FY25.

Here’s a look at what the brokerages made of the earnings.

• Jefferies maintains a "buy" rating on UltraTech Cement.

• The brokerage lowered the company's 12-month price target to Rs 11,500 apiece from Rs 11,560 apiece earlier. This implies a 19% upside to the previous closing price.

• Q4 Ebitda beat brokerage estimates.

• Brokerage generated flat annual sales realisation growth for FY25, compared to the earlier expectation of 1-2%. This follows a weak Q4 exit and a muted start in Q1 FY25.

• Jefferies trims FY25 Ebitda estimates by 2% while retaining FY26 estimates.

• Assumes an Ebitda per tonne level of Rs 1,215 for FY25

• Citi maintains a "buy" rating on UltraTech Cement.

• The brokerage has raised its target price on the stock to Rs 11,700 apiece, implying a 17% upside.

• UltraTech Cement is Citi's top cement pick.

• Q4 Ebitda was ahead of brokerage estimates on higher volumes and better costs.

• Expect a 12% volume CAGR over FY24–27.

• The return on capital employed is expected to rise from an average of 13% to around 16–17%.

• Citi has revised its FY25/26 consolidated Ebitda estimates by -5%/+1% to incorporate recent pricing trends and results.

• Motilal Oswal maintains a "buy" rating on the stock

• It assigns a target price of Rs 11,500 for UltraTech Cement, which implies a 15% upside.

• Q4 operating performance was 9% above the brokerage estimate.

• Estimate a consolidated volume CAGR of 9% over FY24–26.

• Motilal Oswal expects the company's Ebitda per tonne to be at Rs 1,150 and Rs 1,240 in FY25 and FY26, respectively.

• The brokerage believes that the company's improving earnings and return ratios, strong balance sheet, and leadership position in the industry warrant a higher multiple for the counter