Leading brokerages have reiterated their positive outlooks on UltraTech Cement Ltd and JK Cement Ltd, revising target prices upwards for the cement majors after reviewing their first-quarter FY27 financial results. The reports highlight strong operational performance and strategic gains by both companies.
UltraTech Cement Reports Robust Q1 FY27 Performance
UltraTech Cement's Q1 FY27 operating performance largely met analyst expectations. The company recorded a consolidated revenue increase of approximately 16% year-over-year to ₹24,600 crore, while its EBITDA grew by about 14% year-over-year to ₹5,000 crore. Adjusted profit after tax (PAT) saw a 16% year-over-year rise, reaching ₹2,610 crore, outperforming estimates primarily due to lower depreciation and interest costs.
Brokerage Outlook on UltraTech Cement
- Motilal Oswal Financial Services Ltd (MOFSL): Maintaining a 'BUY' rating, MOFSL valued UltraTech Cement at 18x FY28E EV/EBITDA, setting a target price of ₹13,800.
- JM Financial: The firm increased its target price to ₹14,500 (from ₹13,850) and maintained a 'BUY' recommendation, identifying UltraTech as its top pick in the sector.
- Nuvama Institutional Equities: Reiterating its 'BUY' view, Nuvama revised UltraTech's target price to ₹15,209 (from ₹14,502), citing consistent market share gains and exemplary cost control.
- Elara Capital: Elara retained its 'Accumulate' rating with an unchanged target price of ₹13,492, expecting earnings growth to be supported by capacity ramp-up, cost-efficiency initiatives, and brand transition volumes.
JK Cement's Q1 FY27 Performance Exceeds Estimates
JK Cement delivered a Q1 FY27 EBITDA that surpassed brokerage estimates, driven by stronger-than-expected volumes and white cement realizations. The company's revenue increased by approximately 20% year-over-year to ₹4,030 crore. While EBITDA declined by about 6% year-over-year to ₹650 crore, it still beat estimates. PAT declined by about 14% year-over-year to ₹280 crore, also exceeding expectations due to lower depreciation.
Brokerage Outlook on JK Cement
- Motilal Oswal Financial Services Ltd (MOFSL): MOFSL raised its EBITDA estimates for FY27/FY28 by approximately 3% each, maintaining a 'BUY' rating with a target price of ₹6,430.
- JM Financial: The brokerage revised its EBITDA estimates upwards, reiterating an 'ADD' rating with a revised target price of ₹6,250 per share (from ₹6,000).
- Nuvama Institutional Equities: Nuvama maintained its 'BUY' rating for JK Cement, setting a target price of ₹7,034.
- Elara Capital: Elara retained its 'Accumulate' recommendation with an unchanged target price of ₹5,815, anticipating margin recovery from new capacities and ongoing cost-efficiency efforts.