Page 7 - VP-MARCH 2016 final8

fundamental Company Overview
pick
UltraTech Cement (a subsidiary of the Aditya Birla
Ultratech Cement Ltd Group) is the largest manufacturer of grey cement,
ready mix concrete (RMC) and white cement in
Accumulate Target Price Rs 3,102 India. It is also one of the leading cement producers
globally. Its operations span across India, UAE,
Value Parameters 532528 Bahrain, Bangladesh and Sri Lanka. UltraTech
BSE Code ULTRACEMCO Cement is also India's largest exporter of cement
NSE Symbol reaching out to meet the demand in countries
CMP Rs 2,885 around the Indian Ocean and the Middle East.
Face Value Rs 10 UltraTech Cement provides a range of products that
52 Week High/Low cater to the various aspects of construction, from
Market Cap (Rs cr) 3,399/2,530 foundation to finish. These include:
EPS (Rs) (FY15) 75,935
PE ratio (x) 76.5 ¢ Ordinary portland cement, portland blast
37 furnace slag cement and portland pozzalana cement
under grey cement
Shareholding Pattern % (Dec’ 15)
¢ White cement, wallcare putty and white cement
Valuations based products under Birla White

We have assigned an EV/EBITDA multiple of 17x to its ¢ Ready mix concrete and a range of specialty
FY17E and have arrived at fair value of Rs 3,102 per share. concretes with specific functional properties under
We have ACCUMULATE rating on the stock. UltraTech Concrete

¢ AAC blocks, waterproofing solutions, grouting
solutions and plastering solutions under UltraTech
Building Products

Investment Rationale

Ultratech Cement Ltd. has consistently
outperformed the industry. The company has strong
capacity utilization & sound operating efficiency.
The company’s revenue grew at CAGR of 8% for
the period FY 12-15 & is expected to continue to
grow robustly. The company utilizes organic as
well inorganic strategies to grow. Recently the
company acquired Jaypee Associates cement
division having capacity of 22.4 million tonne. The
consolidated capacity for the company will go up to
90.7 million tonne. With this deal the company will
achieve wide-spread presence across the country
with newer markets of Satna, UP East, Himachal
Pradesh and Coastal Andhra where it does not have
a presence as of now. The budget 2016 brought in
various positive amendments for the infrastructure
sector: the government has allocated Rs 97,000
crores for the development of roads & highways;
provided incentives for affordable housing projects
& incremental spending by the government to
develop smart cities. All these factors are likely to
act as a catalyst for further of the cement industry
as well as the company.

7 ARIHANT CAPITAL ¡ MARCH 2016