UltraTech Cement registered a strong operating performance with Ebitda (earnings before interest, tax, depreciation and amortization) rising 30 per cent year on year (YoY) at Rs 2,200 crore led by hefty beat on cost, even as realisation growth was below analysts' estimates. Ebitda/tonne jumped to Rs 1,039 compared to Rs 922 and Rs 777 in Q4FY18 and Q3FY19, respectively.
The company reported more-than-doubled standalone net profit at Rs 1,017 crore in Q4FY19, on the back of strong volume growth. It had a profit of Rs 488 crore in the same quarter a year ago. Domestic sales volume jumped 16 per cent YoY to 20.47 million tonnes. Ebitda improved 200 bps at 23 per cent from 21 per cent in year ago quarter.
Management indicated of tapering of volume growth trend in the month of April, although it expects 8-8.5 per cent YoY growth for FY20. Factoring in the beat on costs and benefit of recent price hikes, the brokerage firm Antique Stock Broking raised EBITDA by around 10 per cent/7 per cent for FY20/FY21e.
A strong recovery in its operating performance after a long time and consistent approach to trim down cost further along with focus on improvement in RoCE augur well for UltraTech Cement, analysts at Reliance Securities said in result update.
The brokerage firm Sharekhan maintain ‘Buy’ rating on UltraTech with a revised price target to Rs 5,000, assigning higher valuation multiple. UltraTech, being the market leader, is expected to reap benefits of the multi-year industry upcycle, the brokerage firm said.