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ICICI Securities research report on UltraTech Cement

UltraTech Cement’s (UTCEM) commentary on short-term challenges (mainly low demand in Q1FY26 and no comments on price hike sustainability) may unnerve a few investors. However, we continue to believe in our sector revival hypothesis (of reducing competitive intensity) and of UTCEM being its largest beneficiary. Our confidence stems from – a) Q4FY25 EBITDA for domestic operations being at a high of INR 1,270/t, up 7% YoY (including India Cements and Kesoram Inds, it stood INR 1,126); b) benefits of recent price increase in South India (of >10% QoQ) and other regions (1-2%) which could drive margin improvement further; c) continued assurance to demonstrate cost savings of ~INR 300/t by FY27 (INR 86/t achieved in FY25) and d) capex-led plan in place to pull up cost efficiency for both ICEM and Kesoram. It is with this confidence that we – 1) broadly retain our FY26E EBITDA; 2) introduce FY27E EBITDA assuming 13% growth and 3) increase our valuation multiple from 18x EV/EBITDA to 19x.

Outlook

Rolling over valuation to FY27E, we maintain BUY with revised TP of INR 13,992 (vs INR 13,033 earlier).

For all recommendations report, click here

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UltraTech Cement - 29042025 - icici

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