UltraTech Cement (UTCEM) has received a vote of confidence from CLSA, which has upgraded the stock to ‘Outperform’ from ‘Hold’ and raised the target price to ₹12,700 from ₹12,100. The brokerage believes that concerns surrounding the company’s diversification into cables and wires (C&W) and profitability pressures due to rising costs are now largely priced in.
CLSA expects UltraTech to benefit from a potential demand and pricing recovery, with its industry-leading organic and inorganic capacity additions likely to help it gain market share. Furthermore, the company’s shift in power mix is expected to drive profitability, making risk-reward at current levels attractive. The brokerage notes that spot cement prices are sufficient to meet 4QFY25 and FY26 estimates, reducing the likelihood of further earnings downgrades.
