UltraTech Cement shares rose Tuesday after the cement giant posted strong revenue and profit in the March quarter, driven by double-digit volume growth and lower costs.

What Happened: Ultratech Cement reported a 35.23% increase in consolidated net profit for Q4 FY24, reaching ₹2,258.58 crore and beating analysts’ forecasts. Analysts had predicted a profit of ₹2,050 crore. The company also declared a dividend of ₹70 per share.

For the fourth quarter, UltraTech’s revenue climbed 9.41% year-over-year to ₹20,418.9 crore, in line with consensus estimates. EBITDA increased by 23.81% to ₹4,113.88 crore, compared to ₹3,322.49 crore last year, and exceeded the estimate of ₹3,815.2 crore. The profit margin improved to 20.14% from 17.8%.

What are analysts saying: Analysts remain optimistic about UltraTech Cement’s prospects. Citi Research maintains a ‘buy’ rating and has raised its target price to ₹11,700, highlighting the company’s higher volumes and improved costs. The company is expected to see a 12% volume CAGR through FY24-27 and targets a capacity of 200 million tonnes. Citi also anticipates an increase in return on capital employed (ROCE) from an average of 13% to 16%/17%.

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Jefferies India also maintained its ‘buy’ rating on UltraTech Cement, slightly lowering the target price to ₹11,500 from ₹11,560. The brokerage noted Ultratech’s EBITDA growth of 24% year-over-year, fueled by better volumes and reduced overheads, despite weak prices. They adjusted FY25 EBITDA estimates down by 2% due to flat expected price growth but anticipate cost-saving measures to improve margins in FY25.

Motilal Oswal also maintains a ‘buy’ rating with a target price of ₹11,500, noting the company’s strong fourth-quarter performance and leadership position. Emkay Global agrees, maintaining a ‘buy’ rating at ₹11,200, though it has adjusted its EBITDA estimates for FY25 and FY26 based on projected market conditions and integration of Kesoram financials.

Price Action: Ultratech Cement shares were up 0.4% at ₹10,004 on Tuesday morning after opening at ₹10,160.30.

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