Ultratech Cement: Prabhudas Lilladher Maintains Buy Rating, Targets Rs 13,835

UltraTech Cement Reports Strong Q4FY26 Operating Performance

UltraTech Cement (UTCEM) has reported a strong fourth quarter (Q4) operating performance for fiscal year (FY) 2026, driven by improved pricing and healthy volume growth. The company's consolidated volumes grew 9% year-over-year (YoY) to 44.7 million tons, supported by strong housing and rural demand.

The improvement in average blended realisation was led by an increase in cement prices and brand transitions during the quarter. Additionally, the brand integration of India Cements and Kesoram was completed ahead of schedule in March 2026.

On the cost front, raw material costs increased due to higher clinker conversion driven by higher volumes. However, power and fuel costs were partly offset by a higher renewable energy mix. Freight costs remained stable due to a reduction in lead distance, while other expenses increased due to higher packaging costs. As a result, the company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) per ton stood at INR1,253, exceeding the previous estimate of INR1,088.

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Looking ahead, we expect UltraTech Cement's volume and EBITDA to deliver a compound annual growth rate (CAGR) of 11% and 17%, respectively, over FY26-28E. The stock is trading at an enterprise value (EV) of 18x and 15.7x FY27E and FY28E EBITDA, respectively. Based on this analysis, we maintain a 'BUY' rating with a revised target price of INR13,835, valuing the company at the same 18x EV of FY28E EBITDA.