UltraTech gains 3% after Q2; Jefferies sees cement price recovery key catalyst

UltraTech Cement’s Q2 Performance Sparks Optimism Amid Price Recovery

The recent quarterly results from UltraTech Cement have reignited investor interest, with analysts highlighting a potential recovery in cement prices as a key driver for future growth.

Strong Financial Performance

UltraTech Cement’s consolidated net profit surged by 21.3% year-on-year to ₹1,493.77 crore for the quarter ending September 30, 2026, compared to ₹1,231.58 crore in the same period last year. Revenue from operations also saw a healthy increase of 18.8%, reaching ₹23,295.07 crore, up from ₹19,606.93 crore. This growth was driven by a substantial rise in domestic grey-cement sales volumes, which grew by 13.8% to 35.94 million tonnes.

Despite a slight narrowing of the PBIDT margin to 16.6% from 16.9%, the overall financial results reflect a strong operational performance. The company’s ability to manage costs amid rising fuel prices has been a focal point, with management indicating a targeted improvement in EBITDA per tonne for FY27.

Analysts’ Insights and Market Sentiment

Following the results, Jefferies noted that the management’s focus on cement pricing rather than volume signals a positive shift in strategy. The brokerage emphasized that a sustained recovery in cement pricing is crucial for UltraTech’s stock performance, reiterating it as a top pick with a revised target price of ₹14,380. This optimism is underpinned by the company’s proactive measures to manage costs and optimize its fuel mix.

Elara Capital echoed similar sentiments, highlighting that while cost pressures may increase in the second half of FY27 due to rising fuel prices, management’s confidence in passing on these costs through price hikes is a positive indicator. The brokerage maintained a ‘Buy’ rating with an unchanged target price of ₹13,006, reflecting a cautious yet optimistic outlook.

Expansion and New Ventures

In addition to its strong financial results, UltraTech Cement has made strides in expanding its product portfolio. The launch of Ultravolt, a new wires and cables business, marks a significant diversification effort. The establishment of a state-of-the-art manufacturing facility in Jhagadia, Gujarat, coupled with plans for a pan-India distribution network, positions the company for further growth and market share gains.

As the company prepares to announce the next phase of its organic expansion, investors are keenly watching how these developments will influence UltraTech’s market position and profitability in the coming quarters.

Key Highlights

• UltraTech Cement’s Q2FY27 net profit rose 21.3% YoY to ₹1,493.77 crore.
• Revenue from operations increased by 18.8% to ₹23,295.07 crore.
• Domestic grey-cement sales volumes grew by 13.8% to 35.94 million tonnes.
• Jefferies raised its target price for UltraTech to ₹14,380, citing pricing recovery as a key catalyst.
• Elara Capital maintained a ‘Buy’ rating with a target price of ₹13,006.
• Launch of Ultravolt expands UltraTech’s product offerings and market reach.

Investor Note: As UltraTech Cement navigates a challenging cost environment, its focus on pricing strategies and product diversification could provide a buffer against inflationary pressures, making it a stock to watch for investors seeking exposure in the cement sector.