Investec has maintained its ‘buy’ rating on UltraTech Cement stock with a target price of ₹12,450, stating that the market has overreacted to the company’s entry into the wire and cable segment. The brokerage noted that this segment offers healthy asset turns (4x) and EBIT margins (8-10%), making the recent stock correction unwarranted.
Investec pointed out that diversification into unrelated categories poses a key risk, but remains positive on UltraTech Cement’s strategic expansion. The brokerage emphasized that the stock’s current decline does not align with its long-term growth prospects and valuation.
Yesterday’s stock price performance:
On February 27, UltraTech Cement’s share price closed at ₹10,450.00, down by ₹514.15 or 4.69%. The stock witnessed a sharp decline despite Investec’s positive outlook, reflecting investor concerns over the company’s diversification strategy.
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