UltraTech Cement delivers 10% volume growth in June quarter; JK Cement continues to outperform peers

We maintain BUY on UltraTech (UTCEM) with a revised target price of INR 12,800. This is a valuation at 17x Mar-27E consolidated EBITDA.

In Q1FY26, UltraTech delivered 10% volume growth (sub-par +3% LTL). This was aided by India Cements (ICEM) consolidation. Unit EBITDA expanded INR 72/MT quarter-on-quarter (Q-o-Q) to INR 1,197/ MT due to healthy pricing. We estimate ongoing cost reduction projects (for core operations) and new projects from margin enhancements of India Cements and Kesoram to beef up consolidated margin going ahead. This may lead to a 34% consolidated EBITDA CAGR during FY25-27E.

We maintain our ADD rating on JK Cement (JKCE) with a revised TP of INR 6,125/share . This is 15x Mar-27E consolidated EBITDA.

Our positive stance is driven by JKCE’s continued outperformance on both volumes and margin front. We estimate JKCE will continue to deliver industry-leading 11% consolidated volume CAGR during FY25-27E and the superior blended unit EBITDA of INR 1,200/1,331 per MT.

In Q1FY25, JK Cement continued it robust show: strong traction in the grey cement drove up consolidated volume by 15% YoY and blended unit EBITDA remained healthy at INR 1,230/MT ( up by INR 229/MT YoY; down by INR 37/MT QoQ). JKCE’s balance sheet and cash flows are well oiled to achieve its targeted 50mn MT grey cement capacity by 2030. Even in the putty space, the upcoming expansion will help the company utilize its surplus white cement capacity to augment putty market share in India.

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 Source: HDFC Securities Institutional Equities

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