ULTRATECH CEMENT shares price: UltraTech Cement Ltd (NSE: ULTRACEMCO) net profit declined 36 percent in the second quarter. This happened due to decreased demand due to monsoons and delays in big projects.
The company’s net profit declined to Rs 820 crore, which was Rs 1280 crore in the same quarter a year ago. This is also less than analysts’ estimates.
The cement company’s revenue also declined by 2.3 percent to Rs 15,635 crore in the September quarter, which was Rs 16,012 crore in the same quarter a year ago.
After the company’s results, brokerage firms have given mixed opinions on the stock. The brokerage has set its target at Rs 12,350 with a bullish opinion.
A Brokerage On UltraTech Cement
A brokerage has given an overweight opinion on UltraTech Cement Ltd and set its target at Rs 13620. He says, “Q2 EBITDA was lower than expected”.
But the downgrade cycle in the results is in its last stage. An increase in demand and expansion in cement prices will increase earnings in the next few years.
Cost-improvement plans will strengthen earnings compounding in the next few years.
Another Brokerage On UltraTech Cement
Another brokerage has given a hold rating on UltraTech Cement Ltd. Its target has been set at Rs 11500.
According to the brokerage, second quarter EBITDA declined due to multi-quarter low profit. The second quarter results indicate a better second half.
Double-digit growth is expected in industry demand. A strong capacity addition pipeline by the company will likely lead to industry volume growth. Despite this, negative risk is also visible in it.
Last Brokerage On UltraTech Cement
The last brokerage has given a buy opinion on the stock and has set its target at Rs 12,350. He says that Q2 margins are likely to improve further from here.
Q2 EBITDA/tonne is expected to increase due to lower power and fuel costs/tonne. Higher-than-expected employee costs/tonne in Q2 impacted EBITDA/tonne performance.
The company is on its way to achieving capacity expansion and cost-reduction targets.
Quick Fact
| Company name | UltraTech Cement |
|---|---|
| Stock price | ₹10,803.40 (0.61%) |
| Net profit (Q2) | ₹820 crore |
| Previous net profit (Q2, last year) | ₹1280 crore |
| Net profit decline | 36% |
| Revenue (Q2) | ₹15,635 crore |
| Previous revenue (Q2, last year) | ₹16,012 crore |
| Revenue decline | 2.3% |
| First brokerage opinion | Overweight |
| First brokerage Possible target | ₹13,620 |
| Second brokerage opinion | Hold |
| The Second brokerage’s Possible target | ₹11,500 |
| Third brokerage opinion | Buy |
| Third brokerage Possible target | ₹12,350 |
| EBITDA (Q2) | Lower than expected |
| Future demand | Expected to rise |
| Cost improvement | Expected to strengthen earnings |
| Industry demand growth | Double-digit percentage expected |
| Capacity addition | Strong pipeline expected |
| Negative risk | Visible despite the positive outlook |
| EBITDA/tonne | Expected to increase |
| Power and fuel costs/tonne | Expected to decline |
| Employee costs/tonne | Higher than expected in Q2 |
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