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IDBI Capital Report
Ultratech Cement Ltd.'s Q1 FY25 Ebitda came below consensus estimates by 11% and it reported Ebitda/tonne of Rs 951 down by Rs 165/tonne QoQ, mainly due to further decrease in average selling price across the country. Despite decline in Ebitda/tonne, it was supported by drop in freight cost and operating leverage benefit.
UltraTech Cement plans to bring down opex/tonne by Rs 300/tonne by improvising fuel mix, enhancing waste heat recovery system capacity and reducing lead distance. UltraTech Cement capacity addition plans are intact with installed capacity to reach 157 mtpa by FY25E up 18% YoY and further increase of 17% over FY25-27E.
We have changed our rating to Hold (earlier Buy) with target price of Rs 10,816, valuing at 17 times FY26E enterprise value/Ebitda. Demand is expected to remain muted in H1 FY25 and to improve in H2 FY25 as policy formation takes place under new government.
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