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UltraTech Cement Q4 Review - Margin Could Improve In Q1 FY23: IDBI Capital

UltraTech Cement Q4 Review - Margin Could Improve In Q1 FY23: IDBI Capital

<div class="paragraphs"><p>A worker holds up processed cement at a factory. (Photographer Dario Pignatelli/Bloomberg)</p></div>
A worker holds up processed cement at a factory. (Photographer Dario Pignatelli/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

IDBI Capital Report

Ultratech Cement Ltd.'s Q4 FY22 Ebitda came in-line with consensus and ~10% higher than our estimate. Importantly due to low cost coal inventory and domestic coal usage, fuel cost/tonne was up only 3% QoQ.

And Ebitda margin was maintained QoQ in Q4 FY22. However, we have cut Ebitda estimate for FY23E/24E to factor lower volume, cost inflation.

UltraTech Cement has taken price hike of Rs 600/tonne in April 2022 and has guided fuel cost to increase by only 10% (Rs 150/tonne) QoQ in Q1 FY23E.

This implies its Ebitda/tonne could expand QoQ in Q1 FY23E. Company has reiterated its expansion plan of 16 million tonnes per annum is on track and to complete by FY23E.

Sustenance of demand and continuation of hiked price is the key catalyst for stock performance.

Click on the attachment to read the full report:

IDBI Capital UltraTech Cement Q4FY22 Result Update.pdf

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