Although UltraTech Cement’s results for the December quarter of the current financial year (Q3FY25) were not an improvement compared to Q3FY24, the company managed to surpass Street expectations.
Photograph: Amit Dave/Reuters
The company’s profit attributable to the owners of the parent dropped 17.4 per cent year-on-year (Y-o-Y) to Rs 1,469.5 crore in Q3FY25 as against Rs 1,777 crore in Q3FY24.
UltraTech Cement’s revenue, however, grew 2.7 per cent Y-o-Y to Rs 17,193.3 crore in Q3FY25 from Rs 16,740 crore in Q3FY24.
At the operating level, earnings before interest, tax, depreciation and amortisation (Ebitda) fell 11.3 per cent annually to Rs 2,887.1 crore in Q3FY25 from Rs 3,254.6 crore in Q3FY24.
Subsequently, Ebitda margin squeezed to 16.8 per cent in Q3FY25 from 19.4 per cent in Q3FY24.
UltraTech Cement’s Q3 results exceeded Bloomberg analysts’ estimates of a profit of Rs 1,323 crore and revenue of Rs 17,129 crore.
The cement giant’s domestic sales volume grew 10.5 per cent Y-o-Y and 9 per cent quarter-on-quarter (Q-o-Q), the company said.
On the outlook, UltraTech Cement said that the government’s focus on infrastructure and housing projects together with increased rural and urban demand, is expected to generate a sustainable volume growth of 7-8 per cent going forward.
Meanwhile, on the bourses, UltraTech Cement shares rose up to 1.61 per cent to hit an intraday high of Rs 11,606.10, before settling 1.18 per cent lower at Rs 11,287.65 apiece.
In comparison, BSE Sensex settled 0.43 per cent lower at 76,190.45.
Notably, UltraTech Cement ended the previous session (January 23) as top Nifty and Sensex gainer.
Considering this, brokerages have remained upbeat on UltraTech Cement post-Q3 results.
Nuvama analysts highlighted an 11 per cent Y-o-Y growth in consolidated volumes for Q3FY25, outpacing industry growth of around 5 per cent.
The company’s better realisations led to an 8 per cent beat on Ebitda estimates, with Ebitda per tonne rising 31 per cent sequentially to Rs 951.
Management expects domestic capacity to reach approximately 183MT by the end of FY25 and 209MT by FY27, up from 141MT at the start of FY25.
Reflecting the positive outlook on demand growth and pricing, Nuvama has slightly raised its Ebitda forecasts for FY25, FY26, and FY27 by 1 per cent each and maintains a “Hold” rating with a revised target price of Rs 11,574, up from Rs 11,238.
Analysts at JM Financial maintained their FY25E-27E estimates and kept the March 2026 target price at Rs 13,000 (19x FY27E EV/E), reaffirming a “Buy” rating, with UltraTech Cement as their top sector pick. EV/E stands for enterprise value to Ebitda.
UltraTech Cement’s Q3FY25 consolidated Ebitda fell 11 per cent Y-o-Y but rose 43 per cent Q-o-Q to Rs 2,890 crore, slightly beating consensus.
Blended Ebitda/tonne dropped 20 per cent Y-o-Y/31 per cent Q-o-Q to Rs 951.
The company plans to add 68MT to its grey cement capacity, targeting 200MT total capacity through organic and inorganic expansion, aiming for a 27 per cent market share by FY27E (up 450 basis points).
UltraTech also expects structural cost improvements of Rs 200-300/tonne over the next three years, supporting its market share growth and profitability.
Thus, analysts expect strong return ratios over the next 3-4 years driven by better asset turnover, low-cost expansions, and improving profitability.
Goldman Sachs reportedly has also maintained a “Buy” rating and increased its target price to Rs 12,580, up from Rs 12,460, citing volume recovery and lower costs contributing to margin improvement.
Citi, too, maintained “Buy” and raised its target price to Rs 13,100 from Rs 12,500, forecasting a 12 per cent volume compound annual growth rate (CAGR) through FY25-FY27, according to reports.
It highlighted Ebitda per tonne upside, largely driven by cost efficiencies, and a continued growth in profitability.
Reports suggested that Macquarie has maintained an “Outperform” rating and raised its target to Rs 12,705, noting that UltraTech is well-positioned with timely capacity additions and a diversified regional mix.
The company remains a top pick in India’s cement sector, it added.
JPMorgan, maintaining an “Overweight” rating, has set its target price at Rs 13,470, acknowledging that while volumes were in line with expectations and realisations remained flat, cement demand and pricing are expected to improve in the near term.
Reports indicated that DAM Capital has upgraded UltraTech Cement’s rating to “Buy’ and raised the target price to Rs 12,550, while Jefferies also maintained a “Buy” rating, increasing its target to Rs 13,265.
Additionally, Equirus continued with its “Buy” rating, with a target price of Rs 13,490.
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