Buy Ultratech Cement; target of Rs 15,210: Choice Institutional Equities

Moneycontrol • 11 days ago

Original source

Key Investment Pillars

  • Improving pricing momentum: October spot realisation is ~5% above the Q2FY27 average, supporting potential Q3 earnings recovery.
  • Strong volume growth: Q2FY27 volumes are up 12.9% YoY, with capacity utilisation at 71%, reflecting market-share gains.
  • Long-term growth visibility: Supported by infrastructure spending, urban housing, and capacity expansion towards 240 MTPA.
  • Cost optimisation: Efficiency initiatives continue, with non-fossil fuel sources accounting for 47% of power requirements.

Thesis Validation Checklist

  • Sustained price realisation: Monitor if price hikes are sustained and demand normalises.
  • Volume growth: Watch for continued strong volume growth, especially in the South market.
  • EBITDA margin expansion: Track if operating leverage and cost optimisation lead to margin expansion.
  • Capacity utilisation: Monitor if capacity utilisation continues to improve, supporting earnings growth.