Ultratech Cement shares underperform Nifty, down 25% YTD; should you buy, hold or sell?

Ultratech Cement share selling price has plunged around 25 for every cent so considerably this yr, underperforming even benchmark NSE Nifty 50 which has tanked 5 for each cent. The inventory tumbled 6 for each cent on Friday, a day right after the business introduced a Rs 12,900 crore capex strategy of introducing 22.6 million tonnes per annum (mtpa) ability by FY25. According to analysts at Sharekhan, this would help Ultratech Cement in preserving its management positioning in the sector. “We believe that these intense capability additions by significant gamers can put undue stress on operational profitability especially if cement demand does not resonate with the offer and power fees do not normalize to a greater extent,” they explained. Brokerages see up to 30% upside on the stock heading forward.

Sharekhan: Obtain
Goal rate: Rs 7,100 Upside 25%

The brokerage maintains obtain connect with on the stock with revised focus on value of Rs 7,100, “We continue to be optimistic on the domestic cement need expansion above a extended period of time driven by anticipated healthy demand from infrastructure, rural housing and city housing. Having said that, aggressive capacity expansion strategies of big players could get back fired if cement need does not develop in tandem with rising provide,” it claimed. Consequently, there is a danger of achievable downgrades in earnings estimates for the field which includes for UltraTech heading in advance, analysts stated. Looking at the same, they decreased their EV/EBITDA valuation multiple for Ultratech, which is at this time investing at 9.8x EV/EBITDA on FY24E earnings, under its extended-phrase historic regular.

Motilal Oswal: Obtain
Goal selling price: Rs 7,825 Upside 30%

According to analysts at Motilal Oswal, the growth will help it obtain a domestic Gray Cement capacity of 153.5mtpa by FY25. They hope cement shares to underperform in the near-time period, specified the sustained boost in electricity prices, the overall impact of which ought to be felt in 1HFY23 the in the vicinity of-time period weak spot in demand from customers and the partial rollback of the cost hikes in May’22. “We have saved our estimates unchanged as of now however we count on UTCEM to change net cash positive in FY26 (from FY24 before) following announcement of clean capex,” they reported. The brokerage has a invest in phone on the stock with a concentrate on cost of Rs 7,825 and reiterate Invest in score.

Meanwhile, Santosh Meena, Head of Investigation, Swastika Investmart Ltd suggests investors to promote Ultratech Cement shares. “The counter is witnessing a descending triangle development sample. In the past investing session, the inventory has damaged neckline assist with powerful volume. The inventory is investing underneath all its averages which is also a destructive sign for the counter. On the draw back, Rs 5,600 is the important stage and below this, we can assume a totally free fall to Rs 5,000. On the upside, Rs 6,000 is an instant inclined spot,” he mentioned.

(The stock recommendations in this tale are by the respective investigate analysts and brokerage companies. Fiscal Convey On the web does not bear any accountability for their financial investment assistance. Cash markets investments are topic to principles and restrictions. Make sure you talk to your investment advisor in advance of investing.)