Brokerages remained bullish on Ultratech Cement after the company posted an over 100 percent rise year-over-year in its standalone net profit for the quarter ended March 31. The Aditya Birla group company posted a standalone net profit of Rs 1,017.47 crore in the fourth quarter of FY 2018-19, 108 percent up compared to Rs 487.95 crore in the same period last year.

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Extending yesterday's gain, Ultratech Cement shares gained 5 percent in intra-day deals on Thursday. It has gained over 10 percent since Wednesday after the company disclosed results.

Brokerages have "buy" ratings on the stock and have raised its target price for the stock. Strong recovery in the company's operating performance after a long time and consistent approach to trim down the cost further augured well, said analysts.

According to CLSA, the company had a strong end to FY19 and focussed on reducing debt. Election outcome and monsoon will be the key events in the near future, it added, raising its FY19-21 earnings per share (EPS) estimates by 3-11 percent. The brokerage has a "buy" rating on the stock and has raised its TP to Rs 5,270 from Rs 5,025 per share.

"After heightened concerns following ACC’s weak results, UltraTech brought the excitement back with a strong 4QFY19. Understanding quarterly numbers are difficult due to the consolidation of UltraTech Nathdwara Cement Limited (Binani), but organic unit Ebitda near Rs1,100/t was the highlight, a bulk of which came from cost with some support from realisation," CLSA said in a report.

Citi was also positive on the stock and raised its target to Rs 5,250 from Rs 4,650 earlier.

Deutsche Bank believes strong March-quarter result and a positive margin outlook will drive EPS upgrades and expect the margin to now exceed Es 1,100 per tonne supported by price hikes. It raised the company's EPS estimated by a further 8-10 percent and said that every 1 percent increase in price will improve its FY20 EPS estimate by 9 percent.

Deutsche Bank has a 'buy' rating with target raised to Rs 4,815 from Rs 4,575 per share.

Meanwhile, Nomura continues to believe that the cement upcycle has begun as the demand outlook remains strong driven by housing and infrastructure.

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First Published:Apr 25, 2019 12:35 PM IST