3 weeks ago
HomeMarket NewsIndia's largest cement company has a 17% upside potential — Should you buy this analyst 'top pick'
Out of the 46 analysts that have coverage on the stock, 38 have a "buy" rating, while four each have "hold" and "sell" ratings.
Shares of UltraTech Cement Ltd. are in focus on Tuesday, July 22, after brokerages raised their price target on the stock after its quarterly results which were reported during market hours on Monday, July 21.
Analysts have projected up to a 17% potential upside on UltraTech Cement, from its previous closing price of ₹12,561 apiece.
Here are the takeaways from the Concall:
Volumes
Even though the demand was muted during the first quarter, UltraTech's management is targeting 10% volume growth in the financial year 2026 from the previous year.
Pricing
The management highlighted that the industry price has seen uptick in July in comparison to the previous month. Small increases were witnessed in south and east, while north and west have been stable, it said.
On South Market
The south market is getting consolidated and is in good shape, the company's management said. It also indicated strength in prices, saying "south may be the new north".
On India Cements
UltraTech Cement remains confident of reaching four-digit unit EBITDA for India Cements by the financial year 2028, the management said.
Expansion
The company's management is targeting 212 million tonne per annum (MTPA) India capacity by March 2027. The plan for the next leg of expansion will be announced before this fiscal-end, it said.
Capex
The company's target capex for FY26 is ₹10,000 crore. In the June quarter, it stood at approximately ₹2,000 crore.
Analysts positive
Brokerage firm Nomura
reiterated its "buy" rating on UltraTech with a target price of ₹13,900 apiece.
It said UltraTech remains its top pick in the industry. The brokerage increased its earnings before interest taxes depreciation and amortisation (EBITDA) estimates for FY26 and FY27 by 11% and 5%, respectively. It also raised its one-year forward enterprise value/EBITDA multiple to 18x compared to 17x earlier.
The brokerage increased its estimates for UltraTech's volume growth estimates by 4% and 1% for FY26 and FY27, respectively.
For India Cements, it has a built-in ₹1,000 per tonne sustainable EBITDA per tonne compared to the previous estimate of ₹800 per tonne in FY27.
Jefferies too said UltraTech remains its top pick in the cement space. It reiterated its "buy" rating on UltraTech and revised its price target to ₹14,700 per share from ₹14,000 apiece.
DAM Capital reiterated its "buy" rating on the stock as well, with a price target of ₹13,800 per share.
Meanwhile, Nuvama maintained its "hold" rating even as it revised its target to ₹13,628 per share from ₹11,859 apiece. It also raised the target EV/EBITDA multiple to 19x from 18x.
Of the 46 analysts that have coverage on the stock, 38 have a "buy" rating, four have "hold" and "sell" ratings.
UltraTech Cement shares ended the previous session 0.5% up. The stock has gained 9.7% in the past month.
Also Read: Sagar Cements Q1 Results: Profitability returns, price hikes contribute to topline
