Ultratech Vs Ambuja: Who will dominate cement sector?

Large-cap Cement stocks Ultratech Cements and Ambuja Cements are primarily engaged in the manufacturing and sale of Cement and Cement related products primarily across the globe.  

India is the world’s second-largest cement producer, contributing over 8 percent of the global installed capacity. In 2023, the country’s cement market size was 3.96 billion tonnes, and it is projected to grow to 5.99 billion tonnes by 2032, with a CAGR of 4.7 percent from 2024 to 2032. Cement consumption is anticipated to reach 450.78 million tonnes by the end of FY27.

1. Ultratech Cements Ltd

The shares of Ultratech Cements Ltd, with a market capitalization of Rs 2.91 Lakhs Crore, were trading at Rs 10,089 per share which was 3.43 percent lower than the previous closing price of Rs 10,448. The shares generated a return of 54 percent in the past three years, and a return of 136 percent in the past five years respectively. 

The company reported a slight increase in revenue from operations of 2.7 percent from Rs 16,739.97 Crores in Q3FY24 to Rs 17,193.33 Crores in Q3FY25. However, its Net Profits declined by 17 percent from Rs 1,774.78 Crores to Rs 1,473.51 Crores over the same period. Even though the Q3 numbers were muted it beats the street’s estimates. 

UltraTech achieved 73 percent capacity utilization, a 10 percent YoY domestic sales volume growth, and a 13 percent YoY reduction in energy costs. With the India Cements acquisition, its cement capacity reached 171.11 mtpa. Following ongoing expansions and the Kesoram Cement acquisition, the company aims to exceed 200 mtpa capacity by FY27.

Global brokerage Morgan Stanley maintained its ‘overweight’ rating on UltraTech Cement, citing the company’s robust capacity expansion, cost efficiency, and market leadership as key factors for future growth. The brokerage set a 12-month target price of Rs 13,650 for UltraTech Cements Ltd. 

Also read: Why did Patanjali Foods and four other stocks falls up to 15% today?

2. Ambuja Cements Ltd

The shares of Ambuja Cements Ltd, with a market capitalization of Rs 1.14 Lakhs Crore, were trading at Rs 465 per share which was 1.02 percent lower than the previous closing price of Rs 470. The shares generated a return of 52 percent in the past three years, and a return of 124 percent in the past five years respectively. 

The company reported a marginal increase in revenue from operations of 4.5 percent from Rs 8,052 Crores in Q3FY24 to Rs 8,415 Crores in Q3FY25. And its Net Profits jumped by 140 percent from Rs 1,091 Crores to Rs 2,621 Crores over the same period. The Profitability figure also includes Government grants of Rs 913 Crores in this quarter.

The firm has a capacity of 97 MTPA, with 22 MTPA added in the last 24 months. With ongoing projects, capacity is expected to reach 104 MTPA by the end of the current fiscal year, 118 MTPA by FY’26, and 140 MTPA by FY28. Various Capex and Opex initiatives are in place to further enhance cost leadership, with a target of an additional 15 percent reduction by FY28.

Morgan Stanley anticipates continued demand growth in the cement sector in the coming months, driving sustained price increases. The brokerage has set a 12-month target price of Rs 590 for Ambuja Cements.

Cement manufacturers stated that the increased spending on large-scale housing and infrastructure projects announced in the Budget 2025 by Finance Minister Nirmala Sitharaman will boost demand for construction materials and enable capacity expansion. The Cement Manufacturers’ Association views the Budget as presenting a strong vision for India’s development through strategic investments in people, the economy, and innovation. 

Written By Adhvaitha Nayani

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Ultratech Vs Ambuja: Who will dominate cement sector? appeared first on Trade Brains.