Cement major Ultratech on Friday posted the highest-ever profit for the company at Rs 1,777 crore for the quarter ended December, which is higher by 68% compared with Rs 1,058 crore in the same quarter last year. Revenue from operations during the third quarter rose 8% year-on-year (YoY) to Rs 16,740 crore against Rs 15,521 crore in the corresponding quarter of last year.
Read More: UltraTech Cement Q3 Results: Net profit surges 68% YoY to Rs 1,777 crore, meets estimates
Here’s what brokerages recommended:
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BofA: Buy | Target: Rs 10,000
BofA has maintained a buy view on UltraTech Cement for a target price of Rs 10,000. The brokerage has lowered FY25/26 EBITDA estimates by 5- 6% to adjust volume outlook post Q3. In a post-earning stock review note, BofA said that seasonality and other factors impacted volumes in Q3 while prices moved in sync with the demand trends.
Nuvama: Hold | Target: Rs 9,121
Muted pricing environment compelled Nuvama to slash FY24E/25E EBITDA estimates by 5%/3% as it maintained a ‘Hold’ rating with a revised target price of Rs 9,121 versus Rs 8,363.
UltraTech Cement reported 5% YoY volume growth in Q3FY24 with realisations improving 2% QoQ/YoY on account of price hikes undertaken in September 2023, leading to EBITDA beating its estimate by 7%.
Management indicated that price hikes have been rolled back largely. The company unveiled a Phase III expansion plan and factoring in the healthy capacity expansion plans, which should allow UltraTech to grow at above industry volume growth. Nuvama has increased its EV/EBITDA multiple to 15.5X from 14.5x).
Sharekhan: Buy | Target: Rs 11,300
Ultratech reported broadly in-line standalone performance for Q3FY2024, aided by improvement in blended realizations and lower P&F costs despite softer demand growth led by multiple factors, Ronald Siyoni, Associate Vice President, Real Estate, Cement, at Sharekhan said.
“We maintain a Buy on UltraTech with a revised price target of Rs 11,300, increasing our valuation multiple considering its long-term growth potential led by structural demand drivers,” Siyoni added.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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