Ultratech Cement Is Morgan Stanley's Top Pick Among Cement Players — Here's Why

Morgan Stanley has maintained an 'overweight' stance on Ultratech Cement Ltd. and hiked the target price to Rs 14,000 from Rs 13,650. The research firm believes that Ultratech Cement will be a strong earnings compounder over multiple years for reasons such as strong volume growth potential, multiple revenue levers, and cost optimisation.

Morgan Stanley stated in its report that it remains bullish on the company because Ultratech Cement continues to gain market share, both in capacity and volume.

It added that the company's pan-India presence, increasing number of in-house retail outlets, and strong brand pull have continuously helped in gaining volume market share over the past few years; therefore, the brokerage remarked, "despite its large size, we believe this will continue." It estimated a 10% volume compound annual growth rate and a 7.5% industry CAGR for the coming three years.

The research firm considers Ultratech Cement's ability to push volume across pan-India to maximise regional pricing trends, rising share of premium products and direct sales, and expanding in-house retail outlets as key driving forces for the company's superior pricing trajectory against pan-India trends.

According to the report, Ultratech Cement's capacity has expanded from 20% to 28% over fiscal 2022 to fiscal 2025.

Last year, the company guided for a Rs 300 per tonne cost improvement for fiscal 2027, of which it has already achieved Rs 86 per tonne on account of "higher blending ratio, greater share of green power, shift towards alternative fuels and lowered lead distance, also led by expansion", as per the research note.

Therefore, Morgan Stanley declared Ultratech Cement as "the best play" in its cement coverage during the current cycle.

The scrip rose as much as 1.99% to Rs 11,484 apiece, the highest level since May 28, 2025. It pared gains to trade 1.45% higher at Rs 11,425 apiece, as of 11:30 a.m. This compares to a 0.11% decline in the NSE Nifty 50 Index.

Share price has risen 0.01% on a year-to-date basis and is up 5.56% in the last 12 months. Total traded volume so far in the day stood at 1.8 times its 30-day average. The relative strength index was at 36.77.

Out of 44 analysts tracking the company, 36 maintain a 'buy' rating, four recommend a 'hold', and four suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 13.4%.