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ICICI Securities Report
UltraTech Cement Ltd. is likely to be the key beneficiary of expected demand recovery post monsoon, given its low utilisation versus larger peers especially in North / Central regions and expected demand improvement in South / West regions from H2 FY21E.
Acquired assets of Binani Cement Ltd. and Century Textiles and Industries Ltd.’s Cement division may see gradual ramp-up after operating at 60-65% utilisation in FY20.
The Company’s strong profitability would further increase with 10% fixed costs reduction (Rs 5 billion per annum or Rs 60/tonne), improving profitability of Century’s assets, better cost efficiencies and operating leverage.
With better profitability and minimal organic capex plan, UltraTech Cement is likely to turn debt free by FY23E.
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