Hold Ultratech Cements; target of Rs 4571: Arihant Capital

Arihant Capital's research report on Ultratech Cements

Ultratech Cement’s standalone revenue came in at Rs 6671 cr vs. Rs. 6195 cr, a growth of 7.6% on Y-o-Y basis. On consolidated basis the revenue for the quarter stood at Rs 6936 cr vs. Rs 6508 cr Y-o-Y. EBITDA margins contracted by 100 bps to 23% on Y-o-Y basis. Net profit after tax for the quarter decreased by 30% YoY on consolidated basis to Rs 424 cr while standalone PAT stood at Rs. 431 cr. Total comprehensive income for the quarter stood at Rs 425 cr vs. Rs 627 cr on consolidated basis, a fall of 32% YoY.

Outlook

We have valued the stock using EV/EBITDA(x) and have ascribed EV/EBITDA multiple of 19.5(x) to its FY19E estimates & arrived at fair value of Rs. 4,571 per share. We have ‘HOLD’ rating on the stock.

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