UltraTech Cement share price rallied 4.8% to an intra-day high of Rs 10,621.80. They were holding the top spot in the Nifty 50. The surge in the stock price came after the management’s positive commentary on the cement business and brokerage notes.
CLSA on UltraTech Cement: Upgrades rating and target price
CLSA upgraded the stock of UltraTech Cement to ‘Outperform’ from ‘Hold’ as it feels that the stock is well placed to benefit from a sectoral uptick. It also raised the target price to Rs 12,700 from Rs 12,100. Risk-reward is favourable for UltraTech Cement with concerns on diversification to cables & wires and profitability (rising costs) likely priced in.
Citi On UltraTech Cement: Committed to grow core biz
Citi have a ‘Buy’ call on UltraTech Cement as it sees the company remains committed to growing its core business at a faster pace than the industry. Also, the company management said that they will not invest in any other product lines, freezing further concerns. It is expecting 60% revenues from wires as the management believes there is a place for another player.
Morgan Stanley On UltraTech Cement: Overweight as management reiterates focus
Morgan Stanley kept its Overweight rating unchanged on UltraTech Cement, with a target price of Rs 13,650 per equity share. It reiterated that the management says grey cement will remain the company’s core business. The cables & wires business is the only building product business passing management’s screen test.
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Motilal Oswal in a research note said that there are signs of recovery in cement demand after the festive season. It anticipates industry volume to grow 4% year-on-year in FY25, implying a 7-8% YoY growth in Q4 FY25. This growth is expected to be driven by pent-up demand, a rebound in government spending, and robust demand in the real estate and housing sectors.
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Another brokerage house, UBS, said that UltraTech Cement is likely to benefit from C&W business as the management guided for a 60% revenue from housing wires and the rest from cables.
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