Deven Choksey Research has reaffirmed a BUY call on UltraTech Cement, identifying significant growth drivers and robust financial resilience. The stock is recommended for investors aiming for medium- to long-term exposure in India’s leading cement company, with a target price of Rs 14,406, representing a substantial potential upside from current trading levels. The research report from Deven Choksey evaluates operational achievements, strategic future initiatives, and market risks to present a comprehensive picture for discerning investors keen on the Indian infrastructure and building materials sector.

Summary of the UltraTech Cement Investment Case

UltraTech Cement has delivered an impressive Q2 FY26, registering stellar growth in both volumes and profitability. The company’s strong operational execution, cost discipline, and successful integration of acquired assets underpin its improving margin trajectory and expanding market footprint. Management’s medium-term outlook remains boldly optimistic, buoyed by India's ongoing infrastructure boom and rising rural demand. Despite intermittent cost pressures and region-specific price fluctuations, UltraTech’s capital allocation and branding strategy continue to future-proof the business. With proven resilience across economic cycles and a keen focus on scale, diversification, and sustainability, UltraTech remains one of the best-positioned players in the Indian cement domain.

Key Research Recommendation

Deven Choksey Research has reiterated a BUY call on UltraTech Cement, setting a revised 12-month target price at Rs 14,406. This call is rooted in 16.7% upside potential from the latest closing price of Rs 12,342. The valuation is premised at a 20.0x FY27E EBITDA multiple, reflecting management’s confidence in the business’s growth runway and heightened return profile. Investors are advised to watch for normalization of certain operating costs and incremental returns from capacity expansions, which the research house identifies as key earnings levers ahead.

Strong Q2 Performance and Operational Highlights

• Revenue for Q2 FY26 surged to Rs 196,069 mn, up 20.3% year-on-year, on the back of strong domestic cement volumes (+6.8%) and rising realizations (+4.5%). However, seasonal factors caused a 7.8% decline on a sequential, quarter-on-quarter basis.
• EBITDA jumped to Rs 30,943 mn, a 52.6% year-on-year growth, aided by operational efficiencies and a favorable product mix. EBITDA margin expanded by 334 basis points year-on-year to stand at 15.8%, even as it moderated sequentially due to higher maintenance outlays.
• Profit After Tax (PAT) rose 75.2% year-on-year to Rs 12,316 mn, with an improved PAT margin of 6.3%.
• The premium product portfolio grew 14% year-on-year, while the core UltraTech brand saw a 13.2% volume surge, underscoring strategic premiumization and market share gains.

Business Diversification and Regional Growth

UltraTech’s segmental revenues were broadly resilient across grey cement, white cement (+17.5% YOY), and ready-mix concrete lines (+29.6% YOY), with construction chemicals also posting impressive gains. Notably, revenue growth was geographically balanced, with the North, East, and West regions benefiting from robust demand in housing and commercial sectors. A 13% uptick in rural market volumes highlights the efficacy of retail expansion and channel engagement through over 5,000 UltraTech Building Solutions outlets.

Integration of Acquisitions and Cost Control Initiatives

The integration of India Cements (ICL) and Kesoram assets has advanced, with significant conversion of acquired capacity to the UltraTech brand and ongoing profitability uplift projects. Operational cost management was challenged by 617 kiln-days lost to maintenance, elevated advertising spend, and staff costs in the quarter. However, improved fuel mix optimization and a pivot to higher green energy usage have counterbalanced much of the escalation in input costs. Strategic divestments and renewable energy investments are expected to further enhance cost efficiencies over subsequent quarters.

Guidance on Capacity Expansion and Future Plans

UltraTech targets exiting FY26 with a prodigious 200 mtpa installed capacity, with the long-term vision capped at 240–245 mtpa by FY29. The capacity buildout is powered by both greenfield and brownfield projects, primarily in India’s North and West, and is being funded predominantly through internal accruals. Beyond cement, the group’s foray into cables and wires, set to commence production shortly, signals a strategic diversification imperative meant to deepen returns and hedge sectoral risks.

Valuation, Financials, and Target Levels

Key financials for UltraTech indicate healthy compounding, with Revenue CAGR of 19.1% and Adj. PAT CAGR of 41.7% between FY25-27E. Consensus forecasts point to EBITDA margins expanding from 16.5% in FY25 to 22.2% by FY28E. With robust projections on critical return metrics such as RoE (expected to climb from 8.2% to 15.8% by FY28E) and declining net debt/EBITDA (

Risks, Challenges, and Market Outlook

The principal risks to UltraTech’s trajectory include fuel price volatility, monsoon-dependent demand fluctuations, and execution delays in acquired asset integration. Over-supply in northern markets and potential regulatory shifts also line the horizon as watchpoints for investors. Nonetheless, management maintains confidence about sustaining a 7–8% industry CAGR through FY30, banking on India's continued infrastructure momentum and expanding housing sector.

Shareholding Pattern Snapshot

• Promoters: 59.2%
• Foreign Institutional Investors (FIIs): 15.3%
• Domestic Institutional Investors (DIIs): 16.7%
• Others: 8.8%

Final Word for Investors

UltraTech Cement presents an appealing investment case with a clear BUY recommendation, a 12-month target of Rs 14,406, and multiple tailwinds driving volumes, earnings, and valuation multiples. Investors are encouraged to consider the current consolidation phase as an opportunity to establish or scale positions.