Shares of UltraTech Cement climbed 3 per cent in Tuesday’s trade ahead of September quarter results. The cement maker is expected to report a sharp fall in year-on-year (YoY) profit despite a double digit rise in sales. On technical charts, however, the scrip has shown signs of bottoming out, said analysts.
On Tuesday, the scrip rose 2.8 per cent to hit a high of Rs 6,444 on BSE. With this, the stock has climbed 24.93 per cent over its 52-week low of Rs 5,158.05 on June 17.
“With some consolidation seen near the Rs 6,100 level, the stock has shown signs of bottoming out near the trendline support zone on the daily chart. The bias has turned positive. We anticipate a decent pullback to improve the trend, as also indicated by the RSI indicator that has flattened out after the correction,” said Prabhudas Lilladher said while including this stock in its Diwali picks.
The brokerage advised traders to accumulate the stock for an upside target of Rs 7,450-7,600, keeping the stop loss at Rs 5,650.
Q2 results
Emkay Global in its preview note expected UltraTech Cement to report a 45.3 per cent YoY fall in net profit at Rs 718.30 crore compared with Rs 1,313.40 crore in the same quarter last year. Sales are seen rising 14.4 per cent YoY to Rs 13,435.90 crore from Rs 11,743 crore in the year-ago quarter.
PhillipCapital sees profit at Rs 1,007.80 crore, down 23 per cent YoY. This brokerage sees sales figure at Rs 14,098.10 crore. Volume growth seen at 11 per cent YoY (down 4 per cent QoQ). Blended realisations seen rising 6 per cent YoY (down 3 per cent QoQ) while the Ebitda per tonne seen at Rs 934, down 26 per cent YoY (down 24 per cent QoQ).
In case of the cement sector, demand during July-August was hit by monsoon-led seasonality weakness, harvesting and lower sand availability post restrictions on mining in many states, Elara Securities said.
However, several pockets witnessed a partial revival in demand in September, it noted, adding that price hike attempts were seen during the quarter, but were followed by rollbacks, it said while
“We believe the cement industry is well positioned to report healthy performance in the upcoming quarters and H2FY23 should be better than H1 on the back of: easing cost pressure, healthy cement prices and better demand prospects aided by robust traction in government projects, given the National Elections in CY24. Also, expected consolidation in the industry post the Holcim Group deal, should positively impact future pricing trend,” Elara said.
