UltraTech Cement Ltd.'s September-quarter results were broadly in line with expectations, with brokerages focusing on improving cement prices and the company's ability to offset higher input costs. CLSA, Jefferies, BofA Securities, Citi and HSBC retained positive ratings on the stock, although their target price changes were mixed. Analysts highlighted stronger pricing momentum since mid-September and expectations of further increases, while flagging uncertainty around fuel costs and the sustainability of margin recovery.
Management said average trade prices rose 7–10% per bag in the second half of September, while October spot prices were about 5% above the September-quarter average.
The full benefit of recent price hikes is expected to reflect in Q3 earnings, although higher fuel and raw material costs remain a concern. Chief Financial Officer Atul Daga said the company expects further price improvements over the next couple of months. Brokerages broadly expect pricing gains to support profitability, with Jefferies and BofA Securities raising their target prices, while CLSA and Citi cut theirs despite retaining positive ratings.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
UltraTech Cement Q2 Highlights (YoY)
- Consolidated net sales rose 18.9% to Rs 23,024 crore.
- Profit increased 21.3% to Rs 1,501 crore.
- Domestic grey cement volumes rose 13.8% to 35.94 million tonnes.
- Capacity utilisation improved to 71% from 66%.
- Average trade prices rose 7–10% per bag in the second half of September, while October spot prices were about 5% above the September-quarter average.
READ | UltraTech Cement Q2 Results: Net Profit Rises 21% To Rs 1,231 Crore, Revenue Grows 19% YoY
Here's what brokerages are saying after UltraTech Cement announced Q2 results:
CLSA
- Maintained 'High Conviction Outperform'; Target Price Cut To Rs 13,000 From Rs 14,000
- Said Q2 performance was in line with expectations.
- Expects pricing improvements to offset persistent cost pressures.
- Highlighted the company's growth pipeline, including its planned foray into cables and wires.
Jefferies
- Maintained 'Buy'; Target Price Raised To Rs 14,380 From Rs 14,065
- Said volumes, EBITDA and profit rose 13–21% year on year.
- Highlighted improving pricing momentum since mid-September.
- Said management remained focused on protecting EBITDA per tonne despite higher costs.
- Noted that management had raised expectations for its cables and wires business.
- Identified a sustained recovery in cement prices as the key catalyst.
BofA Securities
- Reiterated 'Buy'; Target Price Raised To Rs 13,900 From Rs 13,400
- Described Q2 performance as in line with expectations, with positive commentary on demand and pricing.
- Said industry demand grew 8% in the first half, including around 10% in Q2.
- Highlighted uncertainty around the West Asia conflict and elevated costs as factors that could support cement price increases.
- Said recent price hikes and management's confidence in further improvement indicated a possible bottom in EBITDA per tonne.
READ | UltraTech Cement Q2 Results: Net Profit Rises 21% To Rs 1,231 Crore, Revenue Grows 19% YoY
Citi
- Maintained 'Buy'; Target Price Cut To Rs 13,200 From Rs 14,750
- Said Q2 performance was in line with expectations, although cost pressures remained visible.
- Expects costs and pricing to improve in Q3 following price hikes in September and October.
- Highlighted management's expectation of strong industry growth, with UltraTech growing faster than the industry.
- Identified pricing, premiumisation and cost control as key focus areas.
HSBC
- Maintained 'Buy'; Target Price At Rs 13,200
- Said market share gains were offset by higher costs.
- Noted that spot cement prices were 5% above the Q2 average.
- Said the one-year forward enterprise value-to-EBITDA multiple was below its five-year average of 19.8 times.
- Expects cement price increases to offset cost inflation.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
