The company reported a consolidated profit after tax of Rs 1,313.53 crore for the September quarter, 23 percent lower from Rs 1,702.63 crore in the previous quarter
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//$ .each(d.ac,function(i,v) //{ // accStr+=”+v.nm+”; //}); $ .each(d.data,function(i,v) { if(v.flg == ‘0’) { var modalContent = ‘Scheme added to your portfolio.’; var modalStatus = ‘success’; //if error, use ‘error’ $ (‘.mc-modal-content’).text(modalContent); $ (‘.mc-modal-wrap’).css(‘display’,’flex’); $ (‘.mc-modal’).addClass(modalStatus); //$ (‘#acc_sel_port’).html(accStr); //$ (‘#mcpcp_addportfolio .form_field, .form_btn’).removeClass(‘disabled’); //$ (‘#mcpcp_addportfolio .form_field input, .form_field select, .form_btn input’).attr(‘disabled’, false); // //if(call_pg == “2”) //{ // adtxt =’ Scheme added to your portfolio We recommend you add transactional details to evaluate your investment better. x‘; //} //else //{ // adtxt =’ Stock added to your portfolio We recommend you add transactional details to evaluate your investment better. x‘; //} //$ (‘#mcpcp_addprof_info’).css(‘background-color’,’#eeffc8′); //$ (‘#mcpcp_addprof_info’).html(adtxt); //$ (‘#mcpcp_addprof_info’).show(); 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UltraTech Cement share price fell in the early trade on October 19, a day it reported a consolidated profit after tax (PAT) of Rs 1,313.53 crore for the September quarter, which was 23 percent lower from Rs 1,702.63 crore in the previous quarter on account of higher costs .
On a year-on-year (YOY) basis, there was an increase of 13 percent from the adjusted net profit of Rs 1,166 crore.
UltraTech Cement’s consolidated revenue came in at Rs 12,017 crore, up 1.6 percent from Rs 11,830 crore in June 2021 quarter. On a YoY basis, the revenue was higher by 15.7 percent from Rs. 10,387 crore.
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Here is what brokerages have to say about the stock and the company after the September quarter earnings:
CLSA
CLSA has maintained “outperform” rating as Q2 EBITDA was largely in-line and the company is confident of passing on cost inflation.
The broking house remains positive on its demand outlook.
Citi
The research house has kept the “buy” rating with a target at Rs 8,500 and tweaked FY22-23 EBITDA by 3 percent/-1 percent, incorporating higher realisations and costs.
JPMorgan
JPMorgan has kept a “neutral” rating with a target at Rs 6,890 as it was a weak quarter for the company, driven by pricing declines and higher costs.
The costs could increase sharply from here and it expects cement price increase to offset most of the cost pressure.
The earnings upgrade cycle for company has likely come to an end for now.
Jefferies
Jefferies has maintained “hold” call with the target at Rs 7,200 after the company reported an in-line Q2 with a marginal growth in EBITDA.
The company intends to pass on the cost inflation through price hikes. The research firm expects the stock to remain range-bound until margin visibility improves.
Motilal Oswal
We estimate the company to record an 11.6 percent/18.6 percent CAGR in consolidated EBITDA/adjusted PAT over FY21-24E, driven by higher sales volume/realization and lower interest expenses.
The company’s improved earnings/RoE and improving leverage warrants higher multiples for the stock, which trades at 14.9x/12.6x FY23E/FY24E EV/EBITDA (average one-year forward EV/EBITDA of 14.3x for the last 10 years).
We value the stock at 16x Sep’23E EV/EBITDA to arrive at our target price of Rs 8,700. We reiterate our buy rating.
Sharekhan
UltraTech is likely to benefit from expected healthy cement demand over the long term, driven by timely capacity expansion plans.
The company would also be passing on increased input costs through cement price hikes to consumers, shielding its operational profitability.
We believe the company’s capacity expansion, coupled with de-leveraging of the balance sheet over the next three years, will drive earnings over FY2022-FY2024. We continue to maintain our buy rating on the stock, with an unchanged price target of Rs 8,800.
Prabhudas Lilladher
The company reported Q2FY22 earnings in line with our estimates, largely due to one-time income in other operating income segment. Costs were significantly higher from our estimates due to higher other expenses.
Led by its dominant size (22 percent market share) and highly efficient operations, we believe that company stands out as the best candidate to play the sector. However, we expect near term weakness in the sector due to headwinds on margins coupled with unabated increase in energy cost. Reiterate “buy” with the target price of Rs 8,600, EV/EBITDA of 17.0x FY23e.
At 0920 hours, UltraTech Cement was quoting at Rs 7,313.30, down Rs 84.40, or 1.14 percent on the BSE.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
