UltraTech Cement Q1 beat lifts shares as brokerages raise targets

UltraTech Cement shares rose 2% in Mumbai trading after the company reported first-quarter results that beat analyst estimates, prompting at least four brokerages to raise their price targets on the stock.

Nuvama lifted its target to ₹12,100 from ₹11,650, citing better-than-expected volume growth and margin expansion. The brokerage said UltraTech's cost controls offset higher fuel prices during the quarter. Motilal Oswal raised its target to ₹12,500, pointing to the company's capacity expansion plans and falling debt levels.

Jefferies and Kotak also raised their targets, with Jefferies now at ₹12,800 and Kotak at ₹12,400. Both cited the company's ability to maintain market share in a competitive pricing environment.

UltraTech reported a 12% rise in consolidated net profit to ₹1,836 crore for the quarter ended June, above the ₹1,720 crore consensus estimate. Revenue rose 8% to ₹18,528 crore. EBITDA margin came in at 22.4%, up 120 basis points from a year earlier.

The cement maker's volume grew 11% year-on-year to 33.5 million tonnes, driven by strong demand from infrastructure and housing projects. The company added 5 million tonnes of annual capacity during the quarter, taking total capacity to 156 million tonnes.

UltraTech shares have gained about 22% over the past 12 months, outperforming the Nifty 50's 18% return. The stock trades at 42 times trailing earnings, above its five-year average of 38 times.

The company plans to add another 10 million tonnes of capacity over the next 12 months, with a capital expenditure of ₹6,500 crore for the current fiscal year.