Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
08 March, 2021 12:30 IST
Hold Ultratech Cement with revised target price of Rs 5,744: IDBI Capital
Source: IRIS | 25 Jan, 2021, 01.11PM
Rating: NAN / 5 stars.
Comments  |  Post Comment

Ultratech Cement (UTCEM) Q3FY21 revenue increased by 18% YoY to Rs 123 billion is led by volume and realization. Absolute EBITDA increased by 57% YoY to Rs 31 billion. Cost inflation was visible on QoQ basis, as Opex/t increased by 1% QoQ. EBITDA/t increased to Rs 1356 vs Rs 986 YoY but was down QoQ by Rs 47/t.Driven by healthy CF, Consolidated net debt declined to Rs 94 billion down by Rs 27 billion QoQ. We understand deleveraging to continue despite capex for 19mt capacity. Net debt/EBITDA reduced to 0.7x which was 1.9x YoY.

In Dec-20 UTCEM has guided to add 19.5mt of capacity in the next 3 years (this includes 12.8mt of new expansion plans). Capacity in east region will increase by 10mt, central by 5mt, West/North by 1.8mt/2.5mt. UTCEM has guided by FY23E its total cement capacity will increase to 136mt (up by ~20% vs FY20 capacity).

Commenting on the result review, broking firm IDBI Capital said, "Ultratech Cement Q3FY21 EBITDA came higher than our / consensus estimate by 9% / 14%. Beat is driven by volume, as we modelled volume growth of 5% vs. reported at 14% YoY. Cement demand until H1FY21 was driven by rural India, and from Q3FY21 UTCEM has witnessed demand in Urban housing market too. Region wise, its plant in East operated at 100% utilization, followed up by North, Central and West at 80%+ and South at 70%. Though, EBITDA/t was down by 3% QoQ driven by inflation in the energy prices."

"We factored better than expected result in our full year numbers. This has resulted in increase in the EBITDA by 5-6% over FY21-23E. Revised TP is Rs 5,744 (earlier Rs 5,423) based on unchanged 13x FY23E EV/EBITDA multiple (which is at +1STD of its last 10 years mean)," it said.

IDBI Capital likes UTCEM business which has Numero Uno brand, pan India presence in Indian cement market and its balance sheet is getting lean. "However, due to uptick in the stock price in the last 1 month we lower our rating by one notch to Hold."

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.


 Post Comment
Name Email
Security Code type    into this box
Just Dial zooms on signing advertising pact with Star India - 08-Mar-2021 13:38
Sayaji Hotels soars as its subsidiary inks pact for seven new properties - 08-Mar-2021 13:20
Rushil Decor rallies on starting regular commercial production at Andhra Pradesh Unit - 08-Mar-2021 12:43
AGEL commissions 100 MW Gujarat Wind Power Project 5 months before schedule - 08-Mar-2021 12:30
NMDC surges on fixing iron ore prices - 08-Mar-2021 12:19
Meera Industries jumps on winning export order worth USD 180,000 - 08-Mar-2021 12:03
Jagran Prakashan plans to buyback shares worth Rs 1,180 mn - 08-Mar-2021 09:27
Kotak Mahindra Bank divests 10% stake in ECA Trading Services to its arm - 08-Mar-2021 09:07
Hero MotoCorp February sales crosses 5 lakh units - 05-Mar-2021 17:57
PVR launches new six-screen property in Mysuru - 05-Mar-2021 16:55
Voltas strong performance raises expectations of blockbuster summer sales: Motilal Oswal - 05-Mar-2021 13:27
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer