Valuation premium supported by growth plans

11 Mar 2024
5 Min read 
  • UltraTech Cement has experienced a valuation re-rating due to its capacity additions, market share growth, and cost-saving initiatives.
  •  The company has enough organic growth opportunities to reach its capacity target of 200mtpa.
  •  UltraTech Cement is the market leader with a domestic grey cement capacity of 136mtpa and a market share of 26%.
  •  The company's sustainability initiatives, such as energy transition and decarbonization, support its business growth and profitability improvement.
  •  Financially, UltraTech Cement is expected to see growth in net sales, EBITDA, and adjusted PAT over the next few years.
  •  The company's return ratios are also expected to improve, and it has a strong balance sheet.
  •  The stock is currently trading at a valuation of 18.6x FY25E/FY26E EV/EBITDA.
  •  The target price for UltraTech Cement is INR12,000, and a BUY rating is reiterated.
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