Motilal Oswal has issued a buy rating on UltraTech Cement with a target price of ₹13,800 in its research report dated August 11, 2026. The brokerage highlighted that UltraTech Cement continues to extend its lead over peers across scale, market share, cost leadership, and cash-flow generation. The company's large and diversified manufacturing footprint enables it to capture a disproportionate share of industry growth, while scale benefits structurally lower operating expenses per tonne. The integration of ICEM and Kesoram offers further margin upside as their operations improve toward UTCEM's efficiency levels.
According to Motilal Oswal's analysis, operating profit margin (OPM) is expected to expand by 1.5 percentage points to approximately 21% by FY28. The brokerage projects that return on equity (RoE) and return on capital employed (RoCE) will increase to around 14% and 12% respectively by FY28, compared to 11% and 10% in FY26. These improvements are supported by rising profitability and low expansion costs. The stock is currently trading at 18x/15x FY27E/FY28E EV/EBITDA multiples. Motilal Oswal values UTCEM at 18x FY28E EV/EBITDA to arrive at the target price of ₹13,800.
According to reports from Morgan Stanley, the brokerage's cement stock portfolio has experienced a 1% decline over the past three months and 8% decrease over the last six months on a market cap-weighted average basis. Despite these moderate losses, the firm believes there are several positive developments that could improve the sector's outlook. As reported by Morgan Stanley, cement companies in India have faced significant pressure primarily due to the West Asia conflict and seasonal challenges, but recent developments suggest potential recovery.
As reported by Morgan Stanley, industry demand remained robust during the first quarter of financial year 2027, demonstrating resilience despite multiple disruptions. The brokerage noted that industry demand growth reached 8% year-on-year, compared to 7% YoY in the previous quarter. According to Morgan Stanley, demand growth is expected to remain stable in the near term, with post-monsoon demand serving as a key monitorable for cement companies. The resilience was achieved despite challenges from state elections, extreme summer conditions, and geopolitical uncertainty.
According to Morgan Stanley's analysis, cement companies have successfully managed higher-than-expected cost inflation through multiple mitigation measures. The brokerage highlighted that companies implemented fuel mix optimization with aggressive shift away from petcoke/international coal towards domestic coal, continued shift towards lower-cost power usage, procurement efficiencies, and lead distance optimization. As reported by Morgan Stanley, while elevated costs are expected to persist through Q2F27 due to inventory lag effects, conflict-led cost inflation appears to be around peak levels and should gradually normalize in the second half of FY27.
