UltraTech Cement Q1 Results Review: Motilal Oswal Maintains 'Buy' Post Inline Earnings
Motilal Oswal believes the cement major should benefit from a recovery in cement demand and a positive pricing trend.
(Photo source: UltraTech Cement website)
UltraTech Cement is estimated to continue gaining market share with its robust capacity expansion and increasing scale of operations.
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Motilal Oswal Report
UltraTech Cement Ltd. remains our preferred pick in the cement space given its leadership position in the Indian cement industry, successful integration of acquired assets, cost-saving initiatives, and strong balance sheet (generating strong cash flow to fund its organic expansion and other operational capex).
Over the years, the company has balanced out its pan-India presence with all-round capacity expansions. We believe the company should benefit from a recovery in cement demand and a positive pricing trend.
We estimate a CAGR of 14%/25%/30% in consolidated revenue/Ebitda/PAT over FY25-FY28. We estimate its consolidated volume CAGR at ~12% and Ebitda/tonne of Rs 1,160/Rs 1,250/Rs 1,290 in FY26/FY27/FY28E vs Rs 920 in FY25.
UltraTech Cement is estimated to continue gaining market share with its robust capacity expansion and increasing scale of operations. We estimate its net debt to decline to Rs 30.0 billion (vs Rs 163.4 billion as of Jun’25) and net debt-to-Ebitda ratio at 0.1x by FY28 (vs 1.2 times as of Jun’25).
We value UltraTech Cement at 20x Jun’27E EV/Ebitda to arrive at our target price of Rs 14,600. Reiterate Buy.
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