UltraTech Cement Q2 Results Review - Expect Strong Demand, Price Recovery From Q3; Buy: Systematix

Systematix Research Report

Ultratech Cement Ltd. reported a revenue of Rs 156 billion; largely in line with our expectations while Ebitda/PAT missed our estimates on higher operating costs.

Consolidated revenue was down by 2.4% YoY (-13.5% QoQ) to Rs 156.3 billion in line with our estimate of Rs 151.7 billion as volume growth and realizations remained weak.

Volume lagged and was up only 4.3% YoY (-12.9% QoQ) to 27.8 million tonne (in line with our estimate of 27.2 mt). Blended Realisation/tonne dipped 6.4% YoY and 0.7% QoQ to Rs 5,616 versus our estimate of Rs 5,588. Ebitda was down by 20.9% YoY (-33.6% QoQ) to Rs 20.2 billion; versus our estimate of Rs 22.3 billion.

Ebitda/tonne sank 24.2% YoY (-23.8% QoQ) to Rs 725. Raw material cost declined 45.4% YoY and Power and Fuel cost reduced by 16.1% YoY aiding some Ebitda/tonne recovery. Adjusted profit after tax was down 35.3% YoY (-51.0% QoQ) to Rs 8.3 billion, versus our estimate of Rs 9.6 billion due to higher than-expected interest and depreciation costs.

Lead distance marginally increased from 385 kms in Q1 FY25 to 388 kms in Q2 FY25. We cut our Ebitda estimates by 9% for FY25E but keeps our FY26E estimates largely unchanged.

We forecast a strong 16%/18%/22% CAGR in revenue/Ebitda/PAT over FY24- 26E.

We maintain Buy on the stock with a revised target price of Rs 12,660 from earlier Rs 12,081 based on 20x FY26E EV/Ebitda.

We expect acquisition of Kesoram and India Cement to complete by the next couple of quarters which would augment growth.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.