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Motilal Oswal Report
UltraTech Cement Ltd.’s result highlights the execution of its planned cost rationalization and de-leveraging roadmap.
Despite negative operating leverage (volumes down 32% YoY), the company reported the highest ever Ebitda/tonne of Rs 1,416, led by cost reduction across heads of expenditure.
Net debt also declined by Rs 22 billion (13%) QoQ to Rs 147 billion (1.7 times Ebitda).
We raise our consolidated profit after tax estimate by 23%/11% for FY21/FY22 after factoring lower operating costs as well as lower finance cost (on account of faster de-leveraging).
Besides strong free cash flow, non-core asset sales should further aid de-leveraging.
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