UltraTech Cement shares have demonstrated strong momentum in recent trading sessions, with the stock surging 4.08% to ₹11,105, leading the Sensex gainers according to latest market data. This significant outperformance comes after the company's recent cement price increases helped offset variable cost inflation, as reported by CNBC TV18. The stock's recovery follows HSBC's continued bullish stance with a target price of ₹14,200 per share, implying an upside of around 29% from Friday's closing price of ₹11,014. The brokerage expects UltraTech's industry-leading profitability and volume growth to continue, with recent cement price increases helping the company pass on recent increases in variable costs.
As reported by CNBC TV18, shares of India's largest cement company are down 17% from their recent 52-week high. UltraTech's one-year forward enterprise value-to-EBITDA (EV/EBITDA) multiple has declined from a peak of 26 times to around 13.7 times currently, resulting from this correction. HSBC noted that this valuation de-rating is not justified given that the company's industry-leading volume growth, profitability and market share are likely to remain intact. The brokerage emphasized that UltraTech's Pan-India presence, size and scale should continue to ensure that the stock commands a valuation premium.
According to CNBC TV18, UltraTech Cement shares moved between gains and losses on Monday morning before recovering into the green. The stock was trading 0.4% higher at around ₹11,060 on NSE and 3.7% higher at ₹11,059.90 on BSE. The stock's percentage gain varies across exchanges due to divergence in Friday closing prices following the introduction of the new Closing Auction Session (CAS) on August 3. As reported by CNBC TV18, shares have gained about 6.5% in the last six months but have declined more than 7% since January this year. According to analyst data, 38 of 42 analysts covering UltraTech Cement have a 'Buy' rating, while two each have a 'hold' and 'sell' rating, with the 12-month consensus target price standing at ₹13,956.
HSBC expects the September cement price increases to help the company pass on the recent increase in variable costs, as reported by CNBC TV18. The brokerage also expects UltraTech to continue growing faster than the industry, as it has consistently done in the past. HSBC noted that the company's industry-leading volume growth, profitability and market share are likely to remain intact, supporting the premium valuation thesis despite the recent correction. The latest market performance reflects investor confidence in UltraTech's ability to navigate cost pressures while maintaining its competitive position in the cement industry.
