BackUltraTech Cement shares hit 52-week high on strong Q1 sales growth; Axis Securities sees 10% upside
Ultratech’s total sales volume in the domestic market rose 19.87% to 29.01 MT during the quarter under review as against 24.20 MT in Q1FY23, the company said in a regulatory filing.
PremiumUltraTech Cement share price increased over 2% to hit a fresh 52-week high of ₹8,499.70 apiece on the BSE after the company reported nearly 20% on-year rise in its sales for the quarter ending June 2023.
The company’s consolidated sales in Q1FY24 increased 19.64% to 29.96 million tonne (MT) from 25.04 MT of cement during the same quarter last year.
Ultratech’s total sales volume in the domestic market rose 19.87% to 29.01 MT during the quarter under review as against 24.20 MT in Q1FY23, the company said in a regulatory filing.
Its grey cement sales in the domestic market was 28.60 MT in the June quarter of FY24, registering a 20% growth, while its white cement production was 0.41 MT, up 12% YoY.
The Aditya Birla Group company’s overseas sales, mainly grey cement, was 1.04 MT in Q1 FY24, up 10.63%.
The company registered a capacity utilisation of 90% for the quarter, it added.
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Axis Securities has initiated coverage on UltraTech Cement with a ‘Buy’ recommendation and a target price of ₹9,350 per share, which implies an upside of 10% from Monday’s high price.
UltraTech Cement is currently in the process of expanding its existing capacity in India from 130 mtpa to 155 mtpa which will get operational in phases over FY24-FY26.
The company also reported robust Q4FY23 results on account of higher volumes and stringent control over operating costs.
“With ongoing capacity expansion, superior monitoring of cost drivers, and a strong demand environment, UltraTech Cement is expected to report Revenue, EBITDA, APAT CAGR of 9%, 24% and 32%, respectively over FY23-FY25. The said growth will be driven by the volume growth of 10% CAGR and realization improvement of 1% CAGR over FY23-FY25E," Axis Securities said in a report.
Also Read: Ashok Leyland revs up as June volumes surpass expectations
In light of the strong growth potential for cement consumption moving forward, the brokerage house values UltraTech Cement at 16x FY25E EV/EBITDA to arrive at the target price ₹9,350 per share.
UltraTech Cement shares have rallied over 48% in the last one year and has risen more than 21% YTD.
At 1:25 pm, the shares of UltraTech Cement were trading higher at ₹apiece on the BSE.
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