Analysts Cheer UltraTech Cement’s Cost Cuts, Volume Growth In Q4
A worker guides concrete from a mixer truck into a kibble. (Photographer: Dhiraj Singh/Bloomberg)

Analysts Cheer UltraTech Cement’s Cost Cuts, Volume Growth In Q4

Most analysts maintained their bullish investment recommendation for UltraTech Cement Ltd., citing better-than-expected volume growth, improved realizations and cost cuts.

The cement maker posted 16% sequential growth in volumes in the quarter ended March compared with 2-3.5% growth reported by other Holicim group companies. While its operating profit rose 18.9% sequentially, net profit jumped 12% in the reported quarter.

It even reduced net debt by Rs 10,264 crore for the year ended March. Net debt-Ebitda ratio fell to 0.55x as of March 2021 from 1.72x a year earlier.

Of the 44 analysts tracking the company, 40 have a ‘buy’ rating and the remaining four either recommending a ‘hold’ or ‘sell’, suggesting a potential upside of nearly 9.6%, according to Bloomberg data.

Also read: UltraTech Q4 Results: Profit Rises 12% Sequentially, Beats Estimates

Here’s what brokerages have to say about UltraTech’s fourth-quarter results...


  • Retains ‘buy’ with a target price of TP of Rs 7,650 apiece.
  • Ebitda ahead on stronger volume; PAT impacted by lower other income.
  • Strong volume growth; blended realization also marginally better
  • Lower power/fuel, freight and staff cost offsets higher other opex, raw material costs.
  • Higher realization, lower costs drive further margin expansion.
  • Key downside risks: extended lockdowns, delay in commissioning, lower cement prices.


  • Recommends ‘hold’ rating with a target price of Rs 6,200 apiece.
  • The brokerage has an upside scenario of Rs 8,000 and downside at Rs 3,200 apiece.
  • Higher-than-expected volume growth and lower costs aided outperformance.
  • Net gearing continued to slide down through FY21, a positive.
  • Outlook is fairly positive on the medium term.
  • Covid-19 clouds the near-term visibility.
  • Rs 37-a-share dividend, significantly ahead of the past few years’ level.
  • Present dividend per share translates into about 20% of pre-ex consolidated earnings.


  • Maintains ‘outperform’ rating.
  • Ebitda up 12%/17% versus CLSA/consensus estimates.
  • Higher profitability drives beat with costs largely in line.
  • Debt continues to decline sharply.
  • Stock trades in line with its historical median.

Investec Securities

  • Maintains ‘overweight’ rating with a target price of Rs 8,000 apiece.
  • Broad-based demand recovery in Q4 and potential market share gains a key positive.
  • Realizations were better than the brokerage expected and grew quarter-on-quarter.
  • Costs/tonne were well controlled, although they could increase in Q1.

Key things, as per CLSA, to watch out for in the company’s post-earnings concall...

  • Demand outlook for FY22.
  • Impact of Covid-19 related shutdowns in various states.
  • impact of cost increases on profitability, especially petcoke and international coal.
  • Capex and its progress on expansion projects.
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