On Tuesday, an analyst from Kotak reaffirmed a Sell rating on UltraTech Cement Ltd (UTCEM:IN)stock with a price target of INR 6,900.00.
The assessment followed the company's second-quarter financial results for the fiscal year 2025, which showed earnings before interest, taxes, depreciation, and amortization (EBITDA) falling 6% short of Kotak's projections. This shortfall was attributed to a combination of lower sales volumes and reduced profit margins.
UltraTech Cement's volume growth was reported at 3% year-over-year for the quarter, which, despite being hindered by an extended monsoon season, still managed to surpass the overall industry growth. The management of UltraTech Cement anticipates the completion of two key acquisitions, Kesoram and India Cement, in the second half of the fiscal year 2025.
The analyst noted that recent price increases and a seasonal uptick in demand are expected to bolster margin recovery in the latter half of the fiscal year. UltraTech Cement's operational performance and project execution have been highlighted as exceeding that of its competitors. Nonetheless, the Sell rating has been maintained due to what the analyst describes as "rich valuations."
UltraTech Cement, a prominent player in the cement industry, continues to navigate market challenges while preparing for strategic expansions through acquisitions. The company's efforts to improve margins and maintain industry leadership are recognized, although the current stock valuation prompts caution from Kotak's perspective.
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