UltraTech Cement Stock Target: UltraTech Cement’s Third Quarter Earnings Meet Street Estimates. Should I buy stocks?

Despite Ultratech Cement’s record-high net profit for the quarter ended December, the stock fell over 1 per cent to a one-day low of Rs 9,906 on Saturday. Based on the company’s performance, some brokerage firms maintained its rating, with BofA and Sharekhan recommending a buy stance, while Nuvama reiterated a ‘hold’ stance.

Cement major Ultratech on Friday posted the company’s highest ever profit at Rs 1,777 crore for the quarter ended December, up 68 per cent compared to Rs 1,058 crore in the same quarter last year. Operating revenue in the third quarter increased 8% year-on-year to 16.74 billion rupees compared to 15.521 billion rupees in the same period last year.

Read More: UltraTech Cement Q3 Results: Net profit soared 68% year-on-year to Rs 177.7 billion, meeting estimates.

The brokerage firm’s recommendations are as follows:

BofA: Buy | Goal: Rs 10,000

BofA maintained a Buy rating on UltraTech Cement with a target price of Rs 10,000. The brokerage lowered its FY25/26 EBITDA estimates by 5-6% to adjust its volume outlook beyond the third quarter. BofA said in a post-earnings stock review note that seasonality and other factors impacted third-quarter trading volume, with prices moving in line with demand trends.

Nubama: Hold | Target: Rs 9,121

Due to the relaxed pricing environment, Nuvama has cut its FY24E/25E EBITDA estimates by 5%/3% while maintaining a ‘Hold’ rating with a revised target price of Rs 9,121 and Rs 8,363.

UltraTech Cement reported a 2% QoQ/YoY improvement in realizations, up 5% YoY in Q3FY24, driven by price increases implemented in September 2023, which resulted in EBITDA beating estimates by 7%.

Management said the price increases have been largely rolled back. The company announced a three-phase expansion plan and contemplates a healthy capacity expansion plan that will allow UltraTech to grow beyond industry size growth. Nuvama increased its EV/EBITDA multiple from 14.5x to 15.5x.

Sharekhan: Buy | Target: Rs 11,300

“Ultratech reported broad in-line standalone performance in the third quarter of 2024, driven by improved mix realization and lower P&F costs, despite slowing demand growth due to multiple factors,” said Ronald Siyoni, Vice President, Real Estate, Cement Division, Sharekhan.

“We maintain a Buy rating on UltraTech with a revised target price of Rs 11,300 and increase the valuation multiple considering its long-term growth potential driven by structural demand drivers,” Siyoni added.

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(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own and do not represent the views of The Economic Times.)