You are here: Home » Markets » News
Business Standard

UltraTech Cement hits 7-month high; stock surges 7% in 3 days

The stock of the cement major was trading higher for the third straight day, ralling 7 per cent during the period and was trading at its highest level since March 6, 2020

Topics
UltraTech Cement | Buzzing stocks | Markets

SI Reporter  |  Mumbai 

Ultratech Cement
In the past three months, UltraTech Cement outperformed the market by gaining 14 per cent, as against 11 per cent rise in the S&P BSE Sensex

Shares of hit a seven-month high of Rs 4,334, up 3 per cent on the BSE, in the intra-day trade on Thursday on expectation of improvement in demand. The stock of the cement major was trading higher for the third straight day, ralling 7 per cent during the period and was trading at its highest level since March 6, 2020.

In the past three months, outperformed the market by gaining 14 per cent after the company reported better-than-expected operational performance in the April-June quarter of FY21 (Q1FY21). In comparison, the S&P BSE Sensex was up 11.3 per cent during the same period.

The company reported a consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs 2,353 crore, as against an average analyst estimate of Rs 1,702 crore. Ebitda margins improved to 31 per cent from 27 per cent in the previous year quarter. A volume decline of 22 per cent year on year (YoY) at 14.65 MT was also better than analyst estimates of around 34 per cent.

Analysts, now, opine that the cement industry demand is slowly improving from the disruption created from Covid-19 due to pent up demand and improved rural demand.

CARE Ratings believe rural demand will be the major driver for cement considering monsoons have been favourable in most part of the country and the outlook for Kharif crop too looks promising. This could translate in an inflow of cash in the rural economy which could commensurate in infrastructure creation, thus, augmenting cement demand. On the flipside demand for the commodity has been subdued in urban India.

India's cement industry has shown resilience amid the phase-wise opening up of the economy in a seasonally weak quarter. The volume recovery seen in May and June, driven by strong demand from the rural and semi-urban areas, has largely sustained in 2QFY21 (adjusted for monsoon seasonality).

"2QFY21 is seasonally the weakest quarter of the year due to heavy monsoon rains across most parts of the country. Accordingly, we have seen cement demand decline on a MoM basis since July even this year. However, on a YoY basis, demand recovery seen in June has sustained even in this quarter – a positive for the sector outlook," Motilal Oswal Financial Services said in sector update.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, October 08 2020. 13:49 IST
RECOMMENDED FOR YOU
.