Why UltraTech Cement Shares Are In Focus Today?

UltraTech Cement Ltd. saw some mixed reactions from investors on Friday despite the company reporting a 68.75% year-on-year surge in its second-quarter profit, reaching ₹1,280.38 crore, closely aligning with analysts’ expectations.

UltraTech Cement Q2 Performance: The company’s revenue climbed 15.3% to ₹16,012.1 crore, while EBITDA saw a 36.7% increase, reaching ₹2,550.9 crore. The margin stood at 15.93%. Sales volume also grew by 15.5% YoY, hitting 26.7 million tonnes, and the company utilized 75% of its capacity.

Domestic grey cement sales rose 15% YoY, amounting to ₹13,412 crore. Meanwhile, the overseas segment witnessed a 30% revenue increase, reaching ₹600 crore.

Birla White, UltraTech’s business, experienced a 9% YoY revenue growth. Thanks to lower energy costs, the margin improved by 250 basis points. Energy costs dropped by 10% YoY, while raw material costs went up by 4% YoY.

UltraTech also expanded its grey cement capacity in India to 132.45 million tonnes in Q2 and aims to reach 155.05 MT by 2025 after its Phase 2 expansion.

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Analyst Reactions: Analysts have weighed in on UltraTech Cement’s Q2 performance with a positive outlook. HSBC has given a ‘buy’ recommendation, raising its target price from ₹9,100 to ₹9,300, highlighting the company’s outperformance in volume and capacity growth. They anticipate margin expansion in H2 due to price hikes, fuel cost reductions, and fixed cost absorption.

Meanwhile, CLSA upgraded the stock to ‘outperform’, significantly increasing its target from ₹8,400 to ₹9,450, citing margin improvements and strong volume growth. They also noted a rise in net debt to ₹4,900 crore due to various factors. Motilal Oswal maintained its ‘Buy’ stance, adjusting its target price to ₹10,090 from ₹9,600, praising UltraTech’s industry leadership, expansion plans, and cost improvement measures.

Price Action: UltraTech Cement Ltd shares were trading 0.67% lower at ₹8,461.70 on Friday after climbing to an intraday high of ₹8,580 right after the opening bell.

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