Buy UltraTech Cement, target price Rs 6650: Motilal Oswal

Buy UltraTech Cement, target price Rs 6650:  Motilal Oswal

Motilal Oswal has buy call on UltraTech Cement with a target price of Rs 6650. The current market price of UltraTech Cement Ltd. is Rs 5666.5.

UltraTech Cement Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 159754.75 Crore) operating in Cement sector.

For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 12254.12 Crore, up 18.35 % from last quarter Sales of Rs 10354.21 Crore and up 18.35 % from last year same quarter Sales of Rs 10353.80 Crore Company reported net profit after tax of Rs 1584.60 Crore in latest quarter.

Investment Rationale
The valuation is reasonable at 13.4x FY22E EV/EBITDA, a ~20% discount to peer Shree. It values UTCEM at 14x Dec’22E EV/EBITDA to arrive at TP of INR6,650. Reiterate Buy.

Promoter/FII Holdings
Promoters held 60 per cent stake in the company as of Dec 30, 2020, while FIIs held 16.9 per cent, DIIs 14.2 per cent and public and others 9 per cent.

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