Image credit: Outlook India
Shares of the Indian cement company, Ultratech Ltd tanked down by 2.52 per cent at Rs 7,678.85 (−191.25) at 1:32 pm IST in the Tuesday session. Consolidated revenue (including operating income) increased by 6 per cent at Rs 12,985 crore from Rs 12,254 crore in the December 2020 quarter and Rs 12,017 crore in the previous 3 months.
Consolidated profit after tax (PAT) of Rs 1,708 crore was recorded by the company for the third quarter for FY21 and was higher by 7.8% against Rs 1,584 crore in the year-ago period.
The cement stated that the demand slowed down substantially in November 2021 as a result of the construction ban in the NCR after attaining swiftness in October 2021 which was further hindered by extended monsoons in the South and a few states in the North, sand issues in the Eastern region as well as in parts of Uttar Pradesh, and the Diwali holiday season.
The 12-month accord price target indicates an upside of 12.6%. Of the 45 analysts tracking the company, 39 sustain a ‘buy’, four advise a ‘hold’ and two suggest a ‘sell’ according to Bloomberg.
“During the quarter, trade sales were impacted more than non-trade sales, as overall cement demand remained subdued. With the onset of the peak season and rising construction activities, cement demand is expected to revive in Q4FY22, driven by a pick-up in the government-led infrastructure and housing projects. Rural and urban demand was also expected to pick up, which would be good for the company,” the company said in a release.
“We believe UTCEM with its large pan-India diversified market presence, premium brand positioning, timely capacity creation and increased cost efficiencies is better placed to gain market share/improve margins in the medium term. We maintain BUY with a revised target price of Rs 8,080 per share (earlier Rs 8,850) based on 15x FY24E EV/E on quarterly rollover,” it said.
In the white cement segment, UltraTech goes under the brand name of Birla White. It has a white cement plant with a capacity of 0.68 MTPA and 2 Wall-Care putty plants with a fused capability of 0.85 MTPA. With 100+ Ready Mix Concrete (RMC) plants in 39 cities, UltraTech is the largest manufacturer of concrete in India
