UltraTech shares fall as 0.8% equity changed hands in block deal; Pilani likely seller

UltraTech Cement Ltd fell over 2 per cent in Thursday's trade after 0.8 per cent of its equity changed hands in a block, Bloomberg reported. As per the term sheet seen by Business Today earlier, Pilani Investment and Industries Corporation Ltd, a promoter group entity, was looking to sell 17 lakh UltraTech shares, accounting for 0.57 per cent of the total shares outstanding at a floor price of Rs 11,481, which was at 3 per cent discount to Wednesday's closing price. Jefferies India was the sole bookrunner and the deal size was pegged at Rs 1,908.50 crore or $200 million.

At 9.22 am, UltraTech Cement shares were trading 2.14 per cent lower at Rs 11,636 apiece.

Pilani Investment held 1.5 per cent stake in UltraTech Cement as of June 30, data showed.  MOFSL in a fresh note said UltraTech Cement has continued to generate strong operating cash flows, supported by aggressive capacity expansion, higher capacity utilization, and timely integration of large acquisitions.

In FY26, Ultratech's operating cash flow surged 43 per cent YoY to Rs 15,300 crore, outpacing Ebitda growth of 36 per cent to Rs 17,000 crore. OCF/Ebitda conversion ratio stood at 90 per cent in FY26. MOFSL said company has also maintained a higher cash flow conversion ratio in the range of 80-100 per cent over FY21-26, supported by disciplined working capital management.

It expects UltraTech Cement to continue generating strong free cash flow, with cumulative OCF estimated at Rs 33,100 crore over FY27-28, rising from Rs 26,000 crore over FY25-26. MOFSL estimated cumulative capex of Rs 20,000 crore over FY27-28, compared with Rs 18,500 crore over FY25-26.

"Net debt is expected to peak at Rs 18,500 crore in FY27, and should decline from FY28 onward, while net debt-to-Ebitda ratio is expected to remain less than 1 time through FY27-28," MOFS said while suggesting a 'Buy' and a target of Rs 13,800 on the stock.