UltraTech Cement share price may rise another 16% led by market share gains. Motilal Oswal explains why
UltraTech Cement Ltd, the country's largest cement manufacturer has seen its share price gain by around 29% in last one year. While the stock is trading near 52-week highs it scaled ,recently analysts see more upside. The strong Cement demand in the country is helping all Cement makers including UltraTech see a good volume growth.
Besides regular capacity expansions undertaken by the company has meant that UltraTech continued gaining market share too. In the meanwhile, the declining raw material prices has helped UltraTech see better earnings prospects. Looking at strong forward prospects various analysts see further upside to the stock.
Analysts at Motilal Oswal Financial Services see more than 15 % upside for UltraTech from current levels of close to ₹8736 to ₹10,1000. Also Read- CG Power shares surge 20% after company files application for semiconductor unit As per MOFSL UltraTech is well positioned to capture the growing cement demand. UltraTech Cement is breaking new ground with a target to increase its domestic grey cement capacity to 182mtpa by FY27 estimated.
The company’s capacity CAGR (compound annual growth rate) of 9.5% over FY23-27 is considered encouraging given the higher base. With these expansions, UltraTech Cement maintains its leadership position in the industry, said analysts at MOFSL. The Cement demand has remained strong led by government spending on infrastructure as pick up in Real Estate activities further has helped.
The strong Cement demand in itself a lever to propel growth. Cement demand remained strong post Covid-19, reporting a CAGR (Compound annual growth rate) of 9% over FY21-23. Analysts at MOFSL believe that demand improvement was fueled by increased government spending on
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