Goal: ₹13,000
CMP: ₹10,420.65
The board of UltraTech Cement has introduced the corporate’s entry into the wires and cables phase with a deliberate capex outlay of ₹1,800 crore over the following 2 years. The plant might be arrange close to Bharuch, Gujarat, and the corporate goals to fee it by Dec’26.
On full ramp-up, we estimate potential EBITDA accretion of 4-5 per cent on FY27E EBITDA base. Given the group’s development ambitions and UltraTech’s strong cashflow era (OCF of ₹29,000 crore over FY26E-27E), we additionally don’t rule out the opportunity of the group getting into into different constructing answer segments in future. Earlier, the group had introduced its entry into the paints phase by means of Grasim.
Although capex depth is low and unlikely to stretch the stability sheet (internet debt of ₹16,600 crore as of Dec’24), the funding right into a non-cement enterprise is more likely to elevate considerations over capital allocation.
We keep Purchase with Mar’26E TP of ₹13,000 based mostly on 19x FY27E EV/E as UltraTech’s return ratios are poised to enhance structurally over the following 3-4 years owing to rising asset turnover, low price of expansions, and rising profitability.
