UltraTech Cement shares will be in the spotlight on Friday, January 24, after the company shared its Q3 earnings report. They saw a 17% drop in net profit, which came to Rs 1,469.50 crore for shareholders. However, their revenue went up by 3% from last year, reaching Rs 17,193 crore.
Even with the profit drop, these results were better than what experts expected, who had predicted a net profit of Rs 1,195 crore and revenue of Rs 16,854 crore.
The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell 8% compared to last year, totaling Rs 3,131 crore. Their profit margin also decreased to 17% during this time. UltraTech ran at a capacity of 73% in this quarter, with domestic sales growing by 10% compared to last year. Energy costs showed some relief, dropping by 13% mainly due to lower fuel costs.
In line with its growth plans, UltraTech added 1.8 million tonnes per annum (mtpa) capacity. With the recent purchase of India Cements, their total cement capacity increased to an impressive 171.11 mtpa. Once they finish their current expansion projects and finalize the acquisition of Kesoram Cement (10.75 mtpa), they will surpass an amazing 200 mtpa cement capacity in India by the end of FY27.
So, should you buy, sell, or hold onto UltraTech Cement stocks? Let’s see what the experts have to say:
Macquarie’s View: Macquarie maintained an ‘Outperform’ rating on UltraTech Cement, raising their target price to Rs 12,705 (up 7%). They see demand picking up and cement prices increasing through the second half of 2024, which will positively affect earnings. They believe UltraTech is positioned well due to timely expansions and a diverse market presence. Macquarie ranks UltraTech as the top choice in the Indian cement industry.
Citi’s View: Citi kept a ‘Buy’ rating and increased the target price to Rs 13,100 from Rs 12,500. They predict a 12% growth in sales volume through FY25-27 and believe that earnings per ton will rise thanks to cost savings and steady profitability. The stock is currently trading at $180 EV/T, which is much lower than its historical peak of $250 per ton. Also, cement prices have risen by 1.5% in Central and West India, which is a positive sign.
(Disclaimer: The views and opinions in this article are those of the experts and do not reflect the views of Thellv.news)
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