Ultratech Cement stocks underperform Nifty, down 25% YTD; must you buy, preserve or sell?

Ultratech Cement stocks underperform Nifty, down 25% YTD; must you buy, preserve or sell?

Ultratech Cement share price has plunged over 25 per cent so far this year, underperforming even benchmark NSE Nifty 50 which has tanked 5 per cent. The stock tumbled 6 per cent on Friday, a day after the company announced a Rs 12,900 crore capex plan.

Ultratech Cement stocks underperform Nifty, down 25% YTD; must you buy, preserve or sell?

Ultratech Cement stocks percentage fee has plunged over 25 according to cent to this point this year, underperforming even benchmark NSE Nifty 50 which has tanked five according to cent. The inventory tumbled 6 according to cent on Friday, an afternoon after the enterprise introduced a Rs 12,900 crore capex plan of including 22.6 million tonnes according to annum (mtpa) capability through FY25. According to analysts at Sharekhan, this will resource Ultratech Cement in preserving its management positioning within side the sector. “We agree with those competitive capability additions through huge gamers can positioned undue strain on operational profitability particularly if cement call for does now no longer resonate with the deliver and electricity expenses do now no longer normalize to a better extent,” they said. Brokerages see as much as 30% upside at the inventory going forward.

The brokerage continues purchase name at the inventory with revised goal charge of Rs 7,100, “We continue to be constructive at the home cement call for boom over an extended length pushed through predicted healthful call for from infrastructure, rural housing and concrete housing. However, competitive ability growth plans of big gamers may want to get returned fired if cement call for does now no longer develop in tandem with growing supply,” it said. Consequently, there’s a chance of viable downgrades in income estimates for the enterprise which includes for UltraTech going ahead, analysts stated. Considering the same, they diminished their EV/EBITDA valuation more than one for Ultratech, that’s presently buying and selling at 9.8x EV/EBITDA on FY24E income, beneath its long-time period historic average.

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