ICICI Securities: UltraTech Cement - Reaping Benefits Of Scale, Diversified Market Mix
BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
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.
Click on the attachment to read the full report:
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.