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    CLSA maintains buy on UltraTech Cement, raises target price to Rs 5,500

    Synopsis

    Buy UltraTech Cement Ltd. at a price target of Rs 5500.0 .

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    CLSA has maintained buy rating on UltraTech Cement in the long term and has raised target price to Rs 5,500 from Rs 5,400. The stock ended down 1% at Rs 4250.30 while the BSE Sensex closed 334.54 points down at 38,963.84.

    Company Financials

    For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 9620.47 crore, down -5.47% from last quarter sales of Rs 10177.63 crore and up 18.02% from last year same quarter sales of Rs 8151.46 crore. The company has reported net profit after tax of Rs 578.79 crore in the latest quarter.

    Investment Rationale

    UltraTech’s second quarter results, while complex to analyse due to the Century Textiles (Century) merger, was ahead of estimates led by better realisations and costs, driving 29% Ebitda growth, said CLSA. Management targets to bring debt-to-Ebitda below 2 times by March 2020 which should happen, and it is looking to monetise non-core assets, the brokerage said.
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