Buy UltraTech Cement, target price Rs 6312: Centrum Broking

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Buy UltraTech Cement, target price Rs 6312:  Centrum Broking


Centrum Broking has buy call on UltraTech Cement with a target price of Rs 6312. The current market price of UltraTech Cement Ltd. is Rs 5440.

UltraTech Cement Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 156296.88 Crore) operating in Cement sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 12254.12 Crore, up 18.35 % from last quarter Sales of Rs 10354.21 Crore and up 18.35 % from last year same quarter Sales of Rs 10353.80 Crore. Company reported net profit after tax of Rs 1584.60 Crore in latest quarter.


Investment Rationale
The brokerage upgrades FY21/FY22 EBITDA and earnings estimate and introduce FY23 earnings with EBITDA/EPS estimates of Rs133.9bn/Rs236.2. It assigns 14.0x EV/EBITDA multiple on rolled over FY23e earnings to arrive at a revised target price of Rs.6,312/sh (earlier Rs5,179/sh). UTCEM remains focused on cost reduction (28% green power by FY23) and watchful of any non-systemic price escalation. UTCEM’s focus on improving the balance sheet health continues (net debt reduction of Rs74.24bn in 9MFY21). Pan-India presence and leadership position adds comfort.

Promoter/FII Holdings
Promoters held 59.9 per cent stake in the company as of Sept 30, 2020, while FIIs held 15.4 per cent, DIIs 15.5 per cent and public and others 9.3 per cent.





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