UltraTech Cement's efficiency improvement plans are on track, and it is expected to achieve its target of reducing opex/t by Rs 300/tonne by FY27.
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IDBI Capital Report
UltraTech Cement Ltd.'s Q3 FY25 Ebitda came above our our consensus estimates by 9% and 3% respectively. Ebitda/tone stood at Rs 951/tonne versus Rs 725/tonne.
The improvement in Ebitda was driven by a revival in cement demand across the industry. Additionally, the acquisition of India Cements enabled UltraTech to meet its capacity addition targets ahead of schedule. With this inorganic expansion, UltraTech now holds a strong position in the growing southern market.
The company's efficiency improvement plans are on track, and it is expected to achieve its target of reducing opex/t by Rs 300/tonne by FY27. We have upgraded the rating to ‘Buy' with target price of Rs 13,233, assigning 17 times FY27E enterprise value/Ebitda multiple, backed by improvement in demand, increased capacity, and reduction in operating costs.
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