Dalal Street Investment Journal - - REVIEWS -

We had rec­om­mended Ultratech Ce­ment Ltd in is­sue no. 23 dated Oct 17- Oct 30, 2016 un­der “Cover Story” sec­tion when the scrip was trad­ing at ₹3978.15. Our rec­om­men­da­tion was backed by com­pany’s at­trac­tive valu­a­tion and ex­pected boost in the re­alty sec­tor due to govern­ment’s ini­tia­tives.

Ultratech Ce­ment Ltd. is the largest man­u­fac­turer of ready mix con­crete, grey ce­ment and white ce­ment in India and it is also one of the lead­ing ce­ment pro­duc­ers glob­ally. The com­pany is India’s largest ex­porter of ce­ment. It has 18 in­te­grated plants, one clinker plant, 25 grind­ing units and 7 bulk ter­mi­nals. Its op­er­a­tions span across India, Bahrain, UAE, Bangladesh and Sri Lanka.

On the fi­nan­cial front, the com­pany’s rev­enue in­creased 20.66 per cent to ₹7,520.28 crore in Q1FY18 com­pared to the same pe­riod last year. The com­pany’s PBDT rose 12.41 per cent to ₹1596.75 crore in Q1FY18 from ₹1420.41 crore in Q1FY17. The com­pany’s net profit rose from ₹774.92 crore in Q1FY17 to ₹890.62 crore in Q1FY18, reg­is­ter­ing 14.93 per cent in­crease.

On an an­nual ba­sis, Ultratech Ce­ment posted 12.67 per cent in­crease in its rev­enue to ₹27,162.42 crore in FY17 from ₹24,107.36 crore in FY16. The com­pany’s PBDT in­creased 16.05 per cent to ₹5,043.82 crore in FY17 on a yearly ba­sis. The com­pany’s net profit also in­creased 20.87 per cent to ₹2,627.72 crore for the cor­re­spond­ing pe­riod.

Af­ter our rec­om­men­da­tion, over a one year pe­riod, the share price of Ultratech Ce­ment has not shown ex­pected up­ward move­ment. In fact, it has dipped 0.65 per cent from the rec­om­mended price. So, we rec­om­mend our reader-in­vestors to EXIT the scrip.

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