UltraTech Cement Shares Decline As Q3 Earnings Miss Estimates
The cement maker reported a 38% year-on-year decline in net profit in Q3.
Shares of UltraTech Cement Ltd. fell the most in over four weeks after its net profit declined, missing analysts' estimates.
The cement maker reported a 38% year-on-year decline in net profit at Rs 1062.6 crore, according to an exchange filing. That compares with the 1,710.1 crore consensus estimate of analysts tracked by Bloomberg.
Domestic grey cement sales volume rose 13% year-on-year and 12% quarter-on-quarter, respectively. Energy and raw material costs were up 33% and 13% year-on-year, while they remained flat on a sequential basis.
UltraTech Cement Q3 FY23 (Consolidated, YoY)
Revenues up 20% at Rs 15,521 crore
Ebitda down 3.45% at Rs 2,335.9 crore
Ebitda margin at 15% versus 19%
Net profit down 38% at Rs 1,062.58 crore
The stock fell as much as 2.38% intraday, the most since Dec. 21, to Rs 7,010 apiece on Monday morning.
Total traded volume stood at 2.3 times its 30-day average.
Of the 47 analysts tracking the company, 42 maintain a 'buy' rating, two recommend a 'hold' and three suggest to 'sell', according to Bloomberg data. The average of 12-month target prices suggests a potential upside of 13.2%.
Investec On UltraTech Cement
Maintains a 'buy' rating with a target price of Rs 7,096, implying a downside of 0.5% over the period of next 12 months.
Sticky cost and lower revenue growth, dragged down 3.45% YoY at Rs 2,335.9 crore.
Higher revenue was primarily driven by volume growth.
UltraTech Cement fares high on incremental growth optionality, return on capital employed, operating curves, capital structure, ESG and diversification/distribution, as per the brokerage.