ICICI Securities: UltraTech Cement - Strong Overall Execution; Ripe For Rerating
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ICICI Securities Report
UltraTech Cement Ltd.’s Q2 FY21 consolidated Ebitda at Rs 27 billion (up 41% YoY) with Ebitda/tonne of Rs 1,343/tonne was significantly higher than our/consensus estimates.
Execution was robust across all parameters – volumes grew strong at 7.3% YoY, costs/tonne fell sharply by 7.4% YoY, grey cement realisation rose 2.6% YoY, Ebitda/tonne increased 31% YoY and net debt declined by Rs 25 billion QoQ.
Management suggested demand recovery witnessed during September 2020 has further accelerated in October 2020 with H2 FY21 growth likely to broadly offset approximately 30% YoY drop seen during Q1 FY21.
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