UltraTech Cement Stock Price: Cement major UltraTech Cement on Friday reported its January-March quarter results. For the quarter under review, the company’s consolidated net sales were reported at Rs 18,436 crores, a 19 per cent growth vis-a-vis Rs 15,557 crores in the corresponding period of the previous year.
UltraTech Cement’s net profit for Q4FY23 came in at Rs 1,666 crores compared to a normalised profit Rs 1,478 crores (before one-time extraordinary gains) in the corresponding period of the previous year. Its profit before interest, depreciation and tax was Rs 3,444 crores as against Rs 3, 165 crores in the corresponding period of the previous year.
For the full financial year 2023, UltraTech Cement’s consolidated net sales jumped 21 per cent to Rs 62,338 crores from Rs 51,708 last year. Profit after tax was Rs 5,064 crores compared to a normalised profit of Rs 5,667 crores in the corresponding period of the previous year.
UltraTech Cement Dividend
The Board of Directors of the company recommended a dividend of 380 per cent at the rate of Rs 38 per equity share of face value of Rs 10 per share, aggregating Rs 1,097.01 crores. “In terms of the provisions of the Finance Act, 2020, the dividend shall be taxed in the hands of shareholders at applicable rates of tax and the Company shall withhold tax at source appropriately,” the company said in an exchange filing.
The Board of Directors have recommended a Rs 38 per share dividend aggregating to Rs 1,097 crore for the year ended 31/0312023.
Should you Buy it?
Brokerages have shared their ratings and opinions on the stock in response to the Q4FY23 earnings results of the cement major.
ICICI Securities Ltd, in its analysis said: “the company had a strong fourth quarter of fiscal year 23 with volumes increasing by more than 14 per cent YoY, a realisation drop stopped at just under 1 per cent QoQ, a decrease in variable cost per tonne of more than 3 per cent QoQ, and a restrained increase in fixed costs of only 5.5 per cent YoY/3 per cent QoQ.”
As a result, the company’s consolidated profits before interest, taxes, depreciation, and amortisation (EBITDA), which came in at Rs 33.2 billion, above expectations by more than 4 per cent. Blended EBITDA/tonne was Rs. 1,048, exceeding expectations by more than 4 per cent.
“Yet, we see limited scope to raise our earnings forecast. Despite easing fuel costs, we maintain there exists a downgrade risk to consensus estimates given the weak cement pricing environment. Further, consistent industry-wide capacity additions and overhang of aggressive expansion by Adani group restrain upward revision to our valuation multiple. We continue to value the company at 15 times FY25E EV/EBITDA and maintain ‘hold’ rating with unchanged target price of Rs 7,295,” said the brokerage in its report.
“We remain positive on the company’s volume prospects in the upcoming quarters considering access to incremental capacity and better demand. Although range-bound movement in cement prices is a challenge, easing fuel prices and UTCEM’s cost savings measures should keep a check on margin. Thus, we reiterate ‘accumulate’ and largely retain our earnings estimates for FY24 and FY25. We roll over to March 2025E from December 2024E and thus, our target price is raised to Rs 8,638 from Rs 8,325 based on 15.5 times (unchanged) FY25E EV/EBITDA,” said Elara Securities (India) Pvt Ltd.
On Friday, UltraTech Cement’s shares closed marginally up by 0.71 per cent at Rs 7,554.60 on the BSE.
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