UltraTech Cement: margin compressed, but profit up 16.8% — the question is price

25 августа UltraTech Cement раскрыла результаты за первый квартал 2026 финансового года (апрель–июнь 2025). Выручка выросла на 15,9% год к году, до 246 482 млн INR, EBITDA — на 12,9%, до 50 154,5 млн INR, чистая прибыль — на 16,8%, до 25 992,8 млн INR. При этом EBITDA-маржа снизилась с 21,4% до 20,8%. Акции торгуются с мультипликатором EV/EBITDA 19,6 против среднего за три года 24,8, что делает бумагу скорее привлекательной, но потенциал роста по модели портала ограничен +10%.

Key takeaways

— Revenue grew 15.9% YoY to INR 246,482 million, while EBITDA margin fell 0.6 pp to 20.8%

— Net profit rose 16.8% YoY to INR 25,992.8 million, but net margin stayed flat at 10.5%

— Leverage stands at 1.28 EBITDA for the last twelve months, with net debt up INR 89.2 billion over the quarter

— Trailing twelve-month dividend yield is 2.2%, below the key rate, but the company maintains payouts

— The stock trades at a discount to its own history: EV/EBITDA of 19.6 versus the three-year average of 24.8

— The portal's model implies upside to fair value of +10%

Attractiveness

Key figures, INR bn

Revenue grew 15.9% YoY to INR 246,482 million, while EBITDA margin fell 0.6 pp to 20.8%

In the first quarter of fiscal 2026 (April–June 2025), UltraTech Cement's revenue reached INR 246,482 million, up 15.9% year on year. This continues a steady growth trend: in the previous quarter (Q4 2026) revenue rose 11.9% YoY, and in Q1 2025 it was up 17.7%.

Quarterly EBITDA came to INR 50,154.5 million, up 12.9% YoY. However, the EBITDA margin fell from 21.4% to 20.8%: cost growth outpaced revenue growth. This points to pressure on operating efficiency despite strong demand.

Net profit rose 16.8% YoY to INR 25,992.8 million, but net margin stayed flat at 10.5%

Net profit for the first quarter of fiscal 2026 was INR 25,992.8 million, up 16.8% from a year earlier. The net margin remained at 10.5% — the same as in the first quarter of the previous year.

Profit growth was driven by operating leverage and, likely, control over finance costs, but the stable margin indicates that the company's pricing power is limited by competitive pressure.

Leverage stands at 1.28 EBITDA for the last twelve months, with net debt up INR 89.2 billion over the quarter

At the end of the first quarter of fiscal 2026, UltraTech Cement's net debt stood at INR 224,261.8 million. It rose by INR 89.2 billion over the quarter, likely due to seasonal working capital buildup and capital expenditure. Over the last twelve months, net debt decreased by INR 1.4 billion.

The ratio of net debt to EBITDA for the last twelve months is 1.28. This is a moderate level that does not constrain the company's investment capacity, but the quarterly increase in debt warrants attention.

Trailing twelve-month dividend yield is 2.2%, below the key rate, but the company maintains payouts

Over the last twelve months, UltraTech Cement paid dividends yielding 2.2% at the current price. This is below the typical yield investors expect from equities in a high-key-rate environment, but the company maintains regular payouts.

The dividend amount depends on profit and distribution policy. Given current profitability and moderate debt, the company can sustain payments, but if capital expenditure remains high, dividend growth may be limited.

The stock trades at a discount to its own history: EV/EBITDA of 19.6 versus the three-year average of 24.8

The current EV/EBITDA multiple is 19.6 based on EBITDA for the last twelve months (INR 174,944.6 million). This is notably below the three-year average of 24.8. Thus, the market values the company cheaper than its own history.

The trailing P/E is 37.5, reflecting a high absolute earnings multiple, but given profit growth and the lower EV/EBITDA relative to history, the stock looks rather attractive.

The portal's model implies upside to fair value of +10%

According to the portal's model, which combines EBITDA growth with a target multiple, the fair value of UltraTech Cement shares is 10% above the current market price. This is a moderate upside that does not imply significant re-rating.

The model incorporates the current EBITDA level and its dynamics but does not assume a sharp improvement in margins. A higher upside would require either faster profit growth or a further decline in the multiple.

Valuation on the latest reported figures

Bottom line

UltraTech Cement reported first-quarter fiscal 2026 results with revenue up 15.9% and net profit up 16.8%, confirming steady demand for cement. However, the EBITDA margin decline to 20.8% and the INR 89.2 billion quarterly increase in net debt point to operational and financial pressure. The stock trades at a discount to its own history on EV/EBITDA (19.6 vs. 24.8), supporting a rather attractive verdict, but the portal's model implies only +10% upside. A revision upward would require margin stabilization and slower debt growth.