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UltraTech Cement Target - | 3180
• UltraTech Cement is one of the most geographically diversified
and undoubted leader in the Indian cement space with a capacity
of 62.0 MT and market share of ~17% in the domestic cement
industry. Also being one of the most efficient players in the
industry, it has commanded better margins compared to its peers.
In FY10-14, the company’s sales and PAT have grown at a CAGR
of 29.9% and 18.3%, to | 20,078 crore and | 2144.5 crore,
respectively
• The company has consistently remained ahead of its peers in
terms of capacity expansion with a CAGR of 23% vs. peer’s CAGR
of 13% over the past five years. The acquisition of the 4.8 MTPA
Gujarat cement unit of Jaypee Cement Corporation at a cost of |
3800 crore has strengthened the company’s presence in the
growing western market. Further, UltraTech is aiming to reach its
total capacity of 70 MT by FY16E, which we believe would help it
to maintain its leadership
• We believe the industry’s capacity utilisation bottomed out at
~69% in FY14. We think low capacity addition & demand
recovery should lift utilisation levels from hereon given the
cyclical upturn in the economy coupled with an expected policy
push to drive investments in infrastructure sector. We forecast
pan-India utilisation at 78% by FY16E that may offer pricing
power. Given the scenario, we expect UltraTech, as an industry
leader with strong balance sheet, to trade at premium valuations
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
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UltraTech Cement Target - | 3180
• UltraTech Cement is one of the most geographically diversified
and undoubted leader in the Indian cement space with a capacity
of 62.0 MT and market share of ~17% in the domestic cement
industry. Also being one of the most efficient players in the
industry, it has commanded better margins compared to its peers.
In FY10-14, the company’s sales and PAT have grown at a CAGR
of 29.9% and 18.3%, to | 20,078 crore and | 2144.5 crore,
respectively
• The company has consistently remained ahead of its peers in
terms of capacity expansion with a CAGR of 23% vs. peer’s CAGR
of 13% over the past five years. The acquisition of the 4.8 MTPA
Gujarat cement unit of Jaypee Cement Corporation at a cost of |
3800 crore has strengthened the company’s presence in the
growing western market. Further, UltraTech is aiming to reach its
total capacity of 70 MT by FY16E, which we believe would help it
to maintain its leadership
• We believe the industry’s capacity utilisation bottomed out at
~69% in FY14. We think low capacity addition & demand
recovery should lift utilisation levels from hereon given the
cyclical upturn in the economy coupled with an expected policy
push to drive investments in infrastructure sector. We forecast
pan-India utilisation at 78% by FY16E that may offer pricing
power. Given the scenario, we expect UltraTech, as an industry
leader with strong balance sheet, to trade at premium valuations
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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