Shares of UltraTech Cement ended in the red on Tuesday, down 3.83% at ₹7,566.25 on BSE.
Goldman Sachs, Credit Suisse, Antique Stock Broking, CLSA, Emkay, Axis Capital and IIFL maintained a buy rating while Macquarie retained an outperform recommendation.
Credit Suisse said it remains bullish on account of strong underlying sector dynamics on demand and pricing, cheaper valuation relative to the market, weaker view on commodities once shortages end and pro-cyclicality in earnings. “With its strong capacity addition pipeline, UltraTech Cement is well-placed to benefit from the current demand upcycle. Moreover, its focus on costs (greater renewable mix and lower clinker-cement ratio) augur well for profitability,” said CLSA. “With likely further price increases and seasonally strong demand we expect the stock to outperform.”
UltraTech reported a net profit of ₹1,710 crore for the quarter, up 8% from a year ago. Ebitda (earnings before interest, taxes, depreciation and amortisation) margin came down to 18% from 25.3% in the same period.
Prabhudas Lilladher has downgraded the stock to accumulate. The brokerage said it likes UltraTech given its market leading position, strong balance sheet and efficient operations but high expectation with a two-year volume CAGR (compounded annual growth rate) of 12%, Ebitda per tonne of ₹1,300 and rich valuation leaves limited upside with a potential risk of earnings downgrade.
