Why Did Prabhudas Lilladher Set UltraTech Cement’s Target at ₹13,425?
Prabhudas Lilladher has maintained a positive stance on UltraTech Cement, setting a target price of ₹13,425. The brokerage noted that while Q2FY26 results reflected softer operating performance due to higher costs, the company’s long-term structural story remains intact. Rising input expenses pushed up the cost per ton by ₹200, and EBITDA per ton came in at ₹914. However, UltraTech expects recovery of around ₹100 per ton in Q3 as cost efficiencies begin to normalize.
The brokerage also highlighted that integration synergies from India Cements and Kesoram acquisitions could lift long-term profitability, with expected EBITDA per ton reaching ₹1,000–₹1,200 by FY28E as the brand transition completes under the UTCEM umbrella.
UltraTech Cement, India’s largest cement producer, continues to consolidate its leadership position through capacity expansion, operational optimization, and strategic mergers. The near-term cost pressure from higher petcoke and fuel prices is likely to ease gradually, supported by softer raw material costs and rising utilization levels in Q3 and Q4FY26.
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According to Prabhudas Lilladher, UltraTech’s cost optimization program remains on track with ongoing investments in alternative fuels, renewable energy adoption, and logistics rationalization. The company’s focus on sustainability and brand conversion is expected to enhance margin visibility from FY27 onwards.
Key Metrics from Q2FY26
| Metric | Value | Notes |
|---|---|---|
| Target Price | ₹13,425 | Based on improved cost efficiency outlook |
| EBITDA per ton | ₹914 | Impacted by high energy and freight costs |
| Cost per ton delta | ₹200 | Cost escalation in Q2FY26 |
| Expected Recovery (Q3FY26) | ₹100 per ton | Efficiency improvements and lower input prices |
| Long-Term EBITDA/t (FY28E) | ₹1,000–₹1,200 | Driven by India Cements & Kesoram integration |
Despite near-term margin compression, the brokerage retains faith in UltraTech’s pricing power and balance sheet strength. The company’s ability to pass on cost hikes, coupled with rising demand from infrastructure and housing sectors, offers multi-year growth potential.
UltraTech’s strategic capacity expansions and industry consolidation benefits are expected to sustain its leadership. As per Prabhudas Lilladher, improving realizations and stable input costs could lead to meaningful margin recovery over the next 12 months.
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The brokerage report also pointed out that India’s cement demand trajectory remains favorable, supported by sustained infrastructure push, rural housing, and strong pre-election spending. With per capita cement consumption still below global averages, UltraTech is well-placed to capture medium-term growth opportunities.
Going forward, analysts will monitor the pace of margin recovery, cost normalization, and integration progress of recently acquired plants. Any improvement in EBITDA per ton beyond ₹1,000 from FY27 onwards could act as a strong re-rating trigger for the stock.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, believes UltraTech Cement’s strategic efficiency drive and brand consolidation strategy position it for superior earnings growth from FY27 onwards. The temporary softness in margins should be viewed as an accumulation opportunity for long-term investors targeting structural compounding in the building materials sector.
Discover more detailed equity analyses and professional market outlooks at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on UltraTech Cement Outlook
- What Is Prabhudas Lilladher’s Target Price for UltraTech Cement?
- How Will Cost Recovery Impact UltraTech’s EBITDA Margins?
- When Will India Cements and Kesoram Integration Start Paying Off?
- Is UltraTech Cement a Good Accumulate Candidate for FY26–FY28?
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.
