ULTRACEMCO - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.0

Let’s break down UltraTech Cement Ltd., India’s largest cement manufacturer and a key player in infrastructure development. While it commands industry dominance, some valuation concerns and earnings volatility are worth noting.

📊 Core Financials Snapshot

Return Metrics

ROCE: 10.9%, ROE: 9.34% — decent for the industry, though not exceptional given the scale

EPS: ₹235 — strong absolute figure showing earnings power at scale

Profit Trends

PAT Q-o-Q: ₹2,482 Cr → ₹2,249 Cr (↓) — indicates margin compression or volume headwinds

Qtr Profit Var: +43.8% — still a healthy annual growth despite quarter dip

Leverage & Liquidity

Debt-to-Equity: 0.34 — conservative gearing level, keeps financial risks low

Dividend Yield: 0.63% — modest; not a yield-focused pick

💸 Valuation Metrics & Signals

Metric Value Insights

P/E Ratio 52.1 Slightly expensive vs. industry PE (51.1) — pricing in growth potential

P/B Ratio ~5.1 Premium valuation — reflective of brand strength and future growth

PEG Ratio -10.1 Negative PEG — signals earnings inconsistency or high valuation stress

Book Value ₹2,399 Trading at ~5x book — justified only if ROE trends improve

🏗️ Business Model & Competitive Moat

Core Business: Cement manufacturing — essential for infrastructure, housing, and industrial projects

Market Leadership: ~130+ MTPA capacity; wide distribution & dealer network

Strengths

Cost-efficient production and logistic integration

Industry leader in ESG initiatives and green cement

Sticky demand in public infrastructure and real estate growth

Weaknesses

Cyclical sector tied to construction demand

Input cost volatility (coal, pet coke)

Weak pricing power regionally due to fragmented competition

📉 Technical Signals

RSI: 49.8 — neutral territory; stock in consolidation phase

MACD: 105 — bullish crossover, could signal near-term upside

DMA Check: Price above both 50-DMA & 200-DMA — trend support intact

Volume: Stable — no signs of breakout or panic selling

🎯 Entry Zone & Long-Term Guidance

Suggested Entry: ₹11,600–₹11,800 — closer to 200-DMA for lower-risk positioning

Target Range: ₹13,500–₹14,000 over 12–18 months based on infrastructure tailwinds

Investor Fit

Great for long-term investors seeking exposure to India’s infra story

Not ideal for value investors due to stretched valuation and PEG distortion

Would you like to run this against peers like Ambuja or Shree Cement to identify relative opportunities? Or maybe chart out the demand outlook tied to India’s housing push and infra allocations? Cementing your next move could be even smoother with a deeper dig.

Edit in a page