IGI Logo

Result Synopsis

Ultratech Cement (UTCEM) clocked consolidated 106MT (+13% y/y) of volume in FY23 aided by robust Q4FY23 volume growth of +15% y/y to 32MT. Further, NSR growth of +3% y/y (+7% y/y in FY23) translates to revenue growth of +18% y/y (+20% y/y in FY23) in Q4FY23. EBITDA came 7% above YSECe to Rs33.2 (+8% y/y) whereas PAT came 4% above YSECe to 16.7bn in Q4FY23 but declined by 32% y/y on account of tax reversal in Q4FY22. Despite muted sequential NSR, EBITDA/te for Q4FY23 came at Rs1048 (Rs1005 FY23) v/s YSECe of Rs982 guided by higher-than-expected fuel cost moderation. Management indicated that the fuel & power cost might remain in range of +Rs1400- 1600/te for FY24E (v/s Rs800-1000/te earlier) as reopening of China will start pushing fuel prices upwards. Therefore, we trimmed our EBITDA by 13% to Rs1150/te for FY24E.

In FY23,UTCEM commissioned 12.4MTPA out of 16.7MTPA of announced capacity under Phase-Iand the remaining 4.3MTPA is under the last phase of commissioning and expected by Q1FY24E. Newly announced phase-II expansion of 22.6MTPA is on track and to be commissioned by FY25-26E in phase manner. Remaining Phase-I (4.3MTPA) & Phase-II (22.6MTPA) expansion will aid UTCEM to grow at ~9% CAGR (v/s industry 6% CAGR) over FY24-26E. Management aspires to improve its green energy share to 36% by FY25E (50% byFY2030) v/s currently 25% with WHRS/Renewable capacity of 210/325 MW leading tomargin accretive. We continue to like UTCEM: 1) Market Leader with +20% share across India, 2) Robust growth plans 3) Aggressive green energy investments & Improving share of green power 4) Strong B/S to back the robust capex plan. Hence, we recommend ADD rating with a TP of Rs8521, valuing the stock at 16.5xEV/EBITDA on the FY25E.

Result Highlights

* Volume came at 31.7MT, registering a growth of 15% y/y and 23% q/q and NSR up by 3% y/y (-2% q/q) resulted in revenue of 18% y/y and 20% q/q to Rs186.6bn (in-line with YSECe) in Q4FY23.
* Total Cost came 2% below YSECe to Rs4839/te up by 6% y/y but corrected by 5% sequentially as power & other cost corrected by 11% & 16% sequentially in Q4FY23. EBITDA/te came at Rs1048 (YSECe of Rs982) declined by 6% but recovered by 16% q/q in Q4FY23.
* EBITDA came at Rs33.2bn (v/s Rs31.1bn YSECe) up by 8% y/y and 42% q/q translates to EBITDA margin of 17.8% in Q4FY23 (v/s 16.6% YSECe) decline by 169bps y/y.
* Adj. PAT came at Rs16.7bn (v/s YSECe Rs16bn) declined by 32% y/y due to tax reversal in Q4FY22 but recovered by 57% q/q because of healthy operating profit and lower finance cost.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632

Above views are of the author and not of the website kindly read disclaime