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.