Shares of UltraTech Cement gains over 1% to hit intra-day high of Rs 11,080 on NS today after the company, India’s largest cement manufacturer, reported a 36% drop in net profit for the September quarter (Q2 FY25), driven by lower revenue from operations.
UltraTech Cement’s Q2FY25 Performance
The cement manufacturer reported a 35.5% year-on-year (YoY) drop in consolidated net profit, falling to Rs 825.18 crore in Q2 FY25 from Rs 1,280.38 crore in the same quarter last year. This sharp decline in profitability reflects the impact of lower revenues and rising costs.
Revenue and Sales Decline
The company’s revenue from operations dipped 2.3% YoY to Rs 15,634.73 crore in Q2 FY25, compared to Rs 16,012.13 crore a year earlier. Net sales also experienced a 2.7% drop, standing at Rs 15,308 crore during the quarter under review.
EBITDA and Margins Also Seen in Pressure
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 21% to R 2,019 crore, down from Rs 2,550.9 crore in Q2 FY24. This decline in operating profitability was accompanied by a margin contraction of 300 basis points (bps), with EBITDA margins slipping to 12.9%.
Brokerages on UltraTech Cement
Macquarie on UltraTech Cement
Macquarie has maintained a “Neutral” rating on UltraTech Cement with a target price of Rs 11,106. According to the report, the company’s Q2 performance was in line with expectations, and the outlook for margins in the second half remains constructive.
Management is optimistic about demand, while ongoing expansion plans are on track. Macquarie expects margins to improve, driven by the normalization of seasonal costs and anticipated cement price hikes.
Goldman Sachs on UltraTech Cement
Goldman Sachs has maintained a “Buy” rating on UltraTech Cement but reduced the target price to Rs 11,720 from Rs 12,430 following its Q2 review. The report highlights management’s optimism about a recovery in the second half, with price increases being a key factor to monitor amid ongoing competition for volume share.
UltraTech remains the only “Buy” in Goldman Sachs’ sector coverage, with the brokerage bullish on the company’s strong balance sheet, cost-saving initiatives, and timely capacity expansions.
Bernstein on UltraTech Cement
Bernstein has maintained a “Market Perform” rating on UltraTech Cement with a target price of Rs 10,508. In its report, Bernstein noted that the Q2 FY25 earnings per share (EPS) remained flat compared to Q2 FY23, while the stock price has nearly doubled since then.
The report highlighted weak demand volumes, though management remains positive on the outlook. Costs are being optimized but may be nearing a floor. Bernstein continues to hold a “Market Perform” stance due to upcoming supply pressures and the stock’s rich valuations.
Stock Performance in Last One Year
UltraTech Cement shares have demonstrated mixed returns across multiple time frames. Over the past month, the stock has given negative returns of 7.87%. The last six months have seen positive results, with a substantial increase of 13.63%, indicating a strong upward trend.
Year-to-date, UltraTech Cement shares have surged by 4%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 29% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.
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