Ultratech Cement - Nirmal Bang Institutional

- UltraTech Cement's (UCL) 1QFY14 financial performance was broadly in line with our as well as Bloomberg consensus estimates, with net sales at Rs49.6bn (in line with our/Bloomberg consensus estimates, respectively) and EBITDA at Rs10.5bn (5%/6% below our and Bloomberg consensus estimates, respectively).

- Net profit at Rs6.7bn was 11%/8% above our and Bloomberg consensus estimates, respectively, primarily due to lower tax provisioning and higher other income.

- We expect muted demand and stable cement prices in the near term due o heavy monsoon rains, but we continue to believe that cement prices will improve from 2HFY14 in the wake of likely pick-up in demand and that the company will be a major beneficiary, being one of the major players in the industry.

- Hence, we have retained our Buy rating on the stock with a target price of Rs2,179.

Source : Equity Bulls

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