MOSL: ULTRATECH CEMENT (Buy)-Demand outlook improving; Deleveraging key focus
ULTRATECH CEMENT: Demand outlook improving; Deleveraging key focus
(UTCEM IN, Mkt Cap USD18.1b, CMP INR4467, TP INR5440, 22% Upside, Buy)
We met UltraTech Cement’s (UTCEM) CFO, Mr. Atul Daga for an update on the company’s business and growth plans. Key insights highlighted from the meeting:
Demand recovering, expect 6-7% volume growth in FY21
- Demand has picked up since Dec’19, which gives hope of volume growth recovering to 6-7% YoY in FY21. It has been nearly flat in FY20.
- Regionally, demand is currently doing best in the East (up >10% YoY) and the West, while it is the worst in the South (declining 8-10% YoY). Demand in the North/Central is also growing in low single digits.
- Demand in the South is expected to recover as the Polavaram project has been re-tendered (which should drive demand in Telangana). Andhra Pradesh projects should also start to get tendered soon.
- UTCEM is currently falling short of grinding capacity in the East (given strong demand growth there), which should be addressed 12-15 months down the line when its planned 3.4mtpa capacities get commissioned.
UltraTech Cement Limited is engaged in the business of cement and cement-related products. The Company manufactures a range of products that cater to construction needs from foundation to finish, including Ordinary Portland Cement (OPC), Portland Blast Furnace Slag Cement (PSC), Portland Pozzolana Cement (PPC), white cement and white cement-based products, ready mix concrete, including specialty concrete, building products, such as aerated autoclaved concrete (AAC) blocks and joining mortars and a host of others in retail formats. Its geographical segments include India and Rest of the World. The Company focuses on various areas, including alternative fuels, waste heat recovery systems, carbon dioxide emission reduction, waste management, water re-cycling and bio-diversity management. It has over 10 integrated cement units, approximately 10 grinding units, a white cement unit, a wall care putty, over five bulk terminals and over 100 ready mix concrete units.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.