Stock to buy: Ultratech Cement share price jumps 3% after UBS upgrade; do you own?

Ultratech Cement share price surged as much as 3.20 per cent on Tuesday's trading session after global brokerage firm UBS upgraded the stock to ‘buy’. At 10:30 am, Ultratech Cement stock was trading at ₹11,428 on NSE.

The global brokerage firm has also increased the target price from ₹9,000 to ₹13,000.

The brokerage maintains a positive outlook on the sector, highlighting structural cost savings, price stabilization following an 8 per cent decline in 9MFY25, and consolidation driven by UltraTech Cement and Ambuja Cement.

UBS has upgraded its ratings for multiple cement stocks and increased target prices across the board.

The brokerage firm has upgraded Ambuja Cement to a 'buy' rating, increasing its target price from ₹475 to ₹620. Dalmia Bharat also received an upgrade, with a new target price of ₹2,100 per share. Meanwhile, ACC maintained its 'buy' rating, with a target price set at ₹2,250.

UBS anticipates that the top two cement manufacturers' market share will increase from 33 per cent in FY24 to 44 per cent by FY30, while the combined market share of the top four players is expected to rise from 48 per cent to 61 per cent over the same period.

The brokerage expects that as consolidation in the cement industry strengthens, existing market leaders will maintain a competitive edge. Additionally, rising housing demand and a resurgence in government capital expenditure are likely to boost cement demand.

With the sector trading slightly above its five-year average on a one-year forward EV/EBITDA basis, market leaders are well-placed to capitalize on ongoing consolidation.

Ultratech Cement Q3 results highlights

Aditya Birla Group UltraTech Cement, a subsidiary of the Aditya Birla Group, reported a 3 per cent year-on-year revenue growth, reaching ₹17,193 crore in the October-December 2024 quarter, as per its Q3 financial results announced on January 23.

The company's net profit amounted to ₹1,473 crore, compared to ₹1,775 crore in the third quarter of the previous financial year, reflecting a 17 per cent year-on-year decline for the current quarter.

The company reported an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of ₹2,888 crore. In the third quarter of FY24, EBITDA was ₹3,131 crore.

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