Jefferies Confirms Bullish Stance on UltraTech Cement Following Impressive Q4 Performance

UltraTech Cement Reports Impressive Q4 Results, Surpassing Expectations

UltraTech Cement Ltd. has showcased a remarkable performance in the fourth quarter, astonishing analysts with results that exceeded expectations. With a notable rebound after three quarters of declining Ebitda, the company’s recent achievements have prompted Jefferies to reaffirm its ‘buy’ rating and boost the price target to Rs 14,000. This resurgence signals a robust recovery for the cement giant.

Strong Financial Performance

The company’s consolidated Ebitda saw a 12% year-on-year increase, reaching Rs 4,620 crore. This figure surpassed Jefferies’ forecast of Rs 4,360 crore, primarily due to impressive cost efficiencies. UltraTech has emphasized its commitment to achieving cost savings of Rs 300 per tonne, with Rs 86 per tonne already realized in the fiscal year 2025.

Consolidated Ebitda: Rs 4,620 crore
Year-on-Year Growth: 12%
Cost Savings Target: Rs 300 per tonne

Strategic Integration and Future Growth

During this quarter, UltraTech successfully completed the full integration of its Kesoram and India Cement operations, leading to a restatement of historical financial data. The management has laid out an ambitious plan to enhance profitability at these subsidiaries through:

Increased capacity utilization
Improved pricing strategies
Enhanced cost efficiencies
Streamlined overheads

This strategic approach aims to bolster the overall performance of both Kesoram and India Cement moving forward.

Building Materials Division on the Rise

UltraTech’s building materials division is gaining momentum, with the number of UBS outlets growing to 4,615 in the final quarter of fiscal 2025. This expansion has contributed over 20% to domestic grey cement sales volumes. Currently, the division generates an annual revenue run rate of approximately Rs 1,000 crore, which is projected to triple to Rs 3,000 crore in the next three years.

Pricing Trends and Market Outlook

Looking ahead, Jefferies anticipates that the recent rise in pricing will positively impact UltraTech’s profitability in the upcoming fiscal quarter. However, industry demand might face challenges due to adverse weather conditions, such as heatwaves.

Stock Performance and Market Reaction

On the stock market, UltraTech Cement’s shares climbed by as much as 0.89%, reaching Rs 12,222 per share, before settling at Rs 12,124, reflecting a modest increase of 0.08% as of 09:19 a.m. This performance is in line with a 0.45% gain in the NSE Nifty 50 Index. Over the year, the stock has appreciated by 6.03%, and a significant 21.58% over the past twelve months.

Current Share Price: Rs 12,124
Year-to-Date Growth: 6.03%
Last 12 Months Growth: 21.58%

In summary, UltraTech Cement’s latest quarterly results not only reflect a strong recovery from previous declines but also set a positive trajectory for future growth, supported by strategic initiatives and an expanding market presence.