MOSL Maintains Buy on Ultratech Cement Amid Expansion Plans
About Ultratech Cement
Ultratech Cement is India's largest manufacturer of grey cement and ready-mix concrete, with a significant presence across southern, western, and northern regions. The company is part of the Aditya Birla Group and focuses on both organic and inorganic growth strategies to strengthen its market position and improve profitability.
MOSL Update: Motilal Oswal Securities has retained a Buy rating on Ultratech Cement with a revised target price of ₹15,200 versus the previous ₹14,600. The brokerage cites strengthened market presence, especially in the southern region through organic and inorganic expansions.
Capacity Growth: Domestic grey cement capacity is projected to rise to 212.2 mtpa by FY27 from 183.4 mtpa in FY25. Ultratech is on track to achieve 200 mtpa ahead of schedule, with further expansion likely soon. Estimated capacity CAGR is ~6% (FY25-28) while volume CAGR is ~12%.
Financial Projections: Market share is expected to reach ~32% by FY28. Revenue CAGR ~14%, EBITDA CAGR ~25%, and PAT CAGR ~30% over FY25-28. Consolidated volume CAGR ~12%; EBITDA/t projected at ₹1,157 / ₹1,252 / ₹1,286 in FY26/27/28. Estimated cumulative OCF of ₹52,100 cr and FCF of ₹26,600 cr over FY26-28.
Debt Management: Net debt is expected to peak at ₹17,700 cr in FY25 (1.4x EBITDA) and reduce to ₹15,500 cr in FY26 (1.2x) and ₹10,000 cr in FY27 (0.6x), supported by inorganic growth and strong cash flows.
Investor Takeaway
Ultratech Cement’s strong expansion trajectory and improving financial metrics make it an attractive play for long-term investors. Monitoring capacity ramp-up and utilization will be key for sustained growth.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
