UltraTech Cement may outperform Dalmia Bharat, says JM Financial; check target prices

Analysts continue to remain positive on UltraTech Cement and expect the stock to deliver strong return, compared to its peers, say Dalmia Bharat. Both technical and fundamental analysts continue to have a bullish view on the stock blue-chip cement maker and see it to deliver decent performance in both short and long-term.

Neeraj Agarwal, Technical & Alternative Research Analysts at JM Financial said that UltraTech Cement is likely to outperform Dalmia Bharat. Explaining his rationale,  UltraTech has moved down by 1.3 per cent while Dalmia Bharat has decreased 6.4 per cent in the last 10 months, resulting in a negative normalised return spread of 7.7 per cent.

"The normalised return spread, in the last 10 months, has reversed from lows of -9 per cent to -6 per cent on multiple occasions. We expect a similar situation to occur. The normalized return spread is trading at 1.8 standard deviation below the mean levels of -3 per cent on a 10-month data window. It is currently at its 1 percentile.," he said.

Shares of Dalmia Bharat were range-bound on Monday as the stock hovered around its previous close at Rs 1,949.10, with a total valuation close to Rs 36,500 crore. On the other hand, shares of UltraTech Cement added more than 1.15 per cent to Rs 11,776.65 during the day, to command a total marketcap of 3.45 lakh crore.

On a 1-month basis, UltraTech Cement has moved up by 3 per cent while Dalmia Bharat has increased by 7 per cent, Agarwal said in his note. As per his ratio of Ultratech to Dalmia Bharat, target price for the trade stands at Rs 12,733 (6.533), while stop loss will be arrived at Rs 10,997 (5.6421).

UltraTech Cement reported a 10 per cent year-on-year (YoY) rise in consolidated net profit at Rs 2,482 crore for the fourth quarter of the financial year 2024-25 (Q4FY25). Its revenue from operations grew 13 per cent YoY to Rs 23,063.32 crore, while Ebitda stood increased 12.3 per cent YoY to Rs 4,618.4 crore. However, margins narrowed marginally to 20 per cent.

Ultratech's management eyes double-digit volume growth in FY26 organically. The company is also on track to achieve cost savings of Rs 300 per tonne by FY27 and expects to spend Rs. 9,000-10,000 crore in FY26 and aims to increase its capacity to 211
MT by FY27, versus 183.4 MT in FY25, said Sharekhan. It has a target price of Rs 13,647 on the stock with a 'buy' rating.

4QFY25 consolidated Ebitda stood at Rs 4,620 crore, 2 per cent above estimate, said InCred Equities. Domestic volume grew by 10 per cent YoY while grey cement realization rose by 1.6 per cent QoQ. The outlook is strong with near-term headwinds, and expected to grow in double digits in FY26F, it added.

Cement prices are better versus FY25 exit level. InCred raised Ebitda estimates by 4 per cent QoQ for FY26F-27F to reflect cost savings and ramp-up of acquired assets. It retained an 'add' rating with a higher target price of Rs 13,550.