UltraTech Cement's share price witnessed a significant surge during Tuesday's trading session, climbing as much as 3.7% to reach ₹12,829 per share. This upward movement follows the company's announcement of stronger-than-anticipated financial results for the December quarter of fiscal year 2025-26 (Q3 FY26).
Impressive Stock Performance and Historical Returns
Today's price appreciation has propelled UltraTech Cement shares to gain over 8% within just one month. Looking at longer timeframes, the cement manufacturer's stock has demonstrated remarkable performance, delivering multibagger returns exceeding 139% over the past five years. Since its initial listing, the stock has generated an extraordinary return of 4,756.43%, highlighting its strong market position and investor confidence.
Robust Q3 FY26 Financial Results
India's largest cement producer, UltraTech Cement, reported substantial growth in net profit for the December quarter, outperforming analyst expectations amid robust cement sales. According to exchange filings, the Aditya Birla Group company achieved a 27% year-on-year increase in consolidated net profit, reaching ₹1,725.40 crore.
The Mumbai-based cement major also recorded a 23% year-on-year rise in revenue from operations, which stood at ₹21,829.68 crore for the quarter. This represents an increase from ₹17,778.83 crore in the corresponding period last year, driven primarily by higher sales volumes and contributions from acquired entities. Consolidated sales volumes grew by 15% year-on-year to 38.87 million tonnes per annum.
Management Insights on Market Dynamics
Atul Daga, Chief Financial Officer at UltraTech Cement, provided valuable context during a post-earnings call with analysts. He emphasized that India is currently experiencing a multi-year infrastructure build-out across various sectors including roads, metros, railways, ports, and housing. Daga noted that emerging avenues such as data centers, renewable energy projects, and urban infrastructure development are creating incremental demand for cement products.
Including other income sources, UltraTech's total consolidated income for the December quarter reached ₹21,965.26 crore. Sales volumes increased by 15% to 33.85 million tonnes, while domestic grey cement production expanded by 15.4% to 36.37 million tonnes during the quarter.
Daga further elaborated on pricing dynamics, stating, "September, October, and November witnessed some softening in prices. However, with growing demand, we are observing price increases across all segments nationwide. There have been cost escalations in pet coke and coal prices. The implementation of the new labor code will have its own impact, along with rupee depreciation. All these factors will influence the cement industry, and naturally, there is justification for passing on these cost increases through pricing adjustments."
Analyst Recommendations and Target Prices
Choice Broking Maintains 'Buy' Rating
Brokerage firm Choice Broking has reaffirmed its 'buy' rating on UltraTech Cement stock, setting a target price of ₹15,210. This suggests a potential upside of approximately 23% from current levels. The firm explained its position in a research note, stating, "We maintain our BUY rating and target price of INR 15,210 on Ultratech Cement Ltd. as our core investment thesis remains unchanged. We continue to be positive on UTCEM due to several factors: ambitious and continuous capacity expansion plans to add approximately 8 million tonnes of capacity in Q4FY26 and 12 million tonnes in FY27E; funding expansion largely through internal accruals; proactive cost-optimization strategies; favorable sectoral pricing environment; and significant demand growth expected from the southern market."
The firm added that their valuation framework, based on Enterprise Value to Capital Employed (EV/CE), provides a rational basis for assigning valuation multiples that capture improving fundamentals, including Return on Capital Employed (ROCE) expansion by 726 basis points over FY25–28E.
JM Financial Also Bullish with Revised Target
Meanwhile, brokerage firm JM Financial has also maintained its 'buy' rating on the stock while revising its target price to ₹14,500. The firm noted that UltraTech reported a strong Q3 FY26 earnings performance, with consolidated EBITDA rising 35% year-on-year and 27% quarter-on-quarter to ₹39.2 billion, exceeding estimates by 8–13% primarily due to lower-than-estimated costs per tonne.
JM Financial stated, "We argue UltraTech is poised for structural improvement in return ratios over the next three to four years owing to: rising asset turnover; low cost of expansion; and improving profitability. Factoring in the Q3 performance and improving demand/pricing dynamics, we are increasing EBITDA estimates by 6% for FY26E and 1–3% for FY27E–28E. We maintain BUY with a revised target price of INR 14,500 based on 19x March 2028E EV/EBITDA. UltraTech remains our top pick in the sector."
Disclaimer: This article is for educational purposes only. The views and recommendations expressed above are those of individual analysts or brokerage companies and not of the publication. Investors are advised to consult certified experts before making any investment decisions.
