Ultratech Cement (UTCEM IN) – Q2FY26 Result Update – Costs delta dented EBITDA; growth story intact – Accumulate
Published on 20 Oct 2025
UTCEM is a structurally superior play on India’s infrastructure growth, with disciplined capital allocation and brand-led premiumization. Newly announced 22.8mt expansion pipeline across brownfield and greenfield projects in growing Northern and Western markets is planned to capture rising domestic cement demand. Despite capacity addition UTCEM’s net debt to EBITDA is expected rise to 0.7x, highlighting strong balance sheet. With green energy mix targeted at 65%, clinker optimization, and GST-led affordability tailwinds, UTCEM is positioned to expand margins and market share further. We cut our FY26E EBITDA estimate by ~1% to factor in weak H1. We expect UTCEM’s Revenue/EBITDA/PAT to deliver a CAGR of 15%/22%/31% over FY25-28E. The stock is trading at EV of 17.4x/15.9x FY27E/28E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs13,425 on higher capex assumptions (earlier Rs13,599) valuing at 18x EV of Sep’27E EBITDA.
