The brokerage firm, Nuvama, has raised its target price for UltraTech Cement to Rs 11,574 per share while maintaining its ‘HOLD’ rating on the stock. According to them, UltraTech Cement has delivered a strong performance in Q3FY25 and exceeded expectations in several key areas.
However, the firm is worried on the valuation front. They maintained the Hold rating, as they believe the stock’s current valuation suggests a more cautious approach.
Nuvama raised target price on UltraTech Cement
The brokerage firm has raised UltraTech Cement’s target price to Rs 11,57 from Rs 11,238 based on an 18x EV/EBITDA multiple for Q3FY27E.
“We are marginally revising up FY25E, FY26E, and FY27E EBITDA by 1% each,” indicating a growth in UltraTech’s future performance but also pointed caution at the current stock price levels.
UltraTech Cement reported an 11% YoY consolidated volume growth in Q3FY25, which surpasses the industry’s growth of approximately 5%. The company’s EBITDA exceeded Nuvama’s estimate by around 8%. The brokerage firm added, “UltraTech’s ability to consistently outperform the industry demonstrates its competitive advantage and robust market share.”
UltraTech management optimistic about growth
Furthermore, the brokerage in its report added that UltraTech Cement’s management is optimistic about growth. The company expects its domestic capacity to reach approximately 183 million tons by the end of FY25, with a further rise to 209 MT by FY27.
Cement realisations improve
Cement realisation saw a 2.5% quarter-on-quarter (QoQ) improvement. “Realisation improved by 2.5% QoQ, with current prices in central and western regions around 1.5% higher than the Q3FY25 average,” added the brokerage.
According to the firm, “The ongoing capacity expansion, including the integration of Kesoram and India Cements, positions UltraTech for continued leadership in the Indian cement market.”
UltraTech Cement Q3 performance
UltraTech Cement, part of the Aditya Birla Group, reported a profit of Rs 1,473.51 crore for the third quarter of the fiscal year, a 16.98% decline compared to Rs 1,774.78 crore in the same period last year. Despite the drop in profit, the company exceeded expectations. Revenue from operations rose by 2.71%, reaching Rs 17,193.33 crore, up from Rs 16,739.97 crore in the third quarter of FY24. Additionally, UltraTech’s EBITDA for the quarter stood at Rs 2,887 crore.
UltraTech Cement Vs Nifty 50
As of today, January 23, UltraTech’s share price fell by 0.72%, during the intraday trading session.
Over the past year, UltraTech Cement share price has seen a 13.47% increase, rising by Rs 1,345.45, compared to Nifty 50’s 8.62% growth, with an increase of 1,848.55 points.
However, in the past six months, UltraTech Cement experienced a slight decline of 1.07%. Similarly, the Nifty 50 saw a drop of 4.55%.