Buy UltraTech Cement; target of Rs 15,200: Motilal Oswal

Motilal Oswal's research report on UltraTech Cement

UltraTech Cement (UTCEM) has in the recent past strengthened its market presence in the southern region through organic and inorganic expansions. The company’s grey cement capacity mix in the south region has increased to ~27% of total capacity currently from ~16% in FY23. Further, its capacity share in the south region (in the industry) has increased to ~25% currently from ~12% in FY23. UTCEM management, in its 1QFY26 earnings concall, sounded optimistic about pricing and profitability in the south region. Despite significant capacity additions in the past two years, we believe the company will continue to expand its presence in the south. The company is on track to achieve its 200mtpa domestic grey cement capacity target well ahead of schedule and is anticipated to announce the next phase of expansion in the coming quarters. We believe UTCEM will announce ~12mtpa clinker/~18-20mtpa grinding capacity expansions across South, North and Central regions.

Outlook

The stock is currently trading at 18.0x/15.0x FY27E/FY28E EV/EBITDA (vs. its 10- year average EV/EBITDA of 17x). UTCEM’s improved earnings, return ratios, and low-cost expansions warrant a higher valuation multiple. We value the stock at 20x Sep’27E EV/EBITDA to arrive at our TP of INR15,200. Reiterate our BUY rating.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

UltraTech Cement - 10092025 - moti