Q2FY23 Preview: Ultratech Cement: Revenue seen at Rs127,876 million, EBITDA at Rs15,537 million

18 Oct 2022 , 06:32 AM

Result date: 19^th October, 2022
Recommendation: Buy
Target price: Rs7,500

Ultratech Cement (Ultratech) could report 7% increase in its sales volumes over the year-ago quarter. Realizations per ton could increase 3.4%, leading to a near 11% growth in the company’s revenue over the year-ago quarter.

But, the good news is likely to end there. The company could witness high pressure on EBITDA and EBITDA per ton in the September 2022 quarter. High level of decline in prices, particularly in North and Central India, is likely to be the key pressure point. The price decline in South and West India have been relatively smaller. UltraTech benefited from the low-cost inventory in Q1FY23, and hence, it is likely to see higher impact.

The company’s EBITDA per ton is pegged at Rs708, down 44.2% over the year-ago quarter.

Important management insights to watch out for:

• Demand and pricing trends across key markets
• Outlook on margins, pricing action
• Progress on expansion plans

	September 2022 estimates	QoQ change	YoY change
Volumes (m MT)	21.9	(9.3)%	7.1%
Realizations (Rs/t)	5,829	(4.1)%	3.4%
Revenues (Rs m)	127,876	(13.1)%	10.7%
EBITDA (Rs m)	15,537	(47.0)%	(40.2)%
EBITDA (Rs/t)	708	(41.5)%	(44.2)%

Source: Company, IIFL Research