UltraTech Cement (UTCEM) continued to improve its costs and margins in 1QFY22. It reported the highest ever EBITDA/unit of Rs 1,536/t (+8% YoY) during the quarter. Coupled with volume growth of 47% YoY, this led to 59% YoY growth in EBITDA.

Commenting on the result review, Motilal Oswal Institutional Equities said, "Market share gains should continue, aided by the ongoing 20mtpa expansion program, which should drive a 13% volume CAGR over FY21-24E.

We estimate a 15%/26% CAGR in consolidated EBITDA/PAT over FY21-23E, driven by a 13% volume CAGR, better realizations, lower operating costs, and lower interest costs.

The valuation is reasonable at 13.7x FY23E EV/EBITDA - a 10% discount to its last five years' average. We value UTCEM at 16x FY23E EV/EBITDA to arrive at TP of Rs 8,770. Reiterate Buy."