UltraTech Cement Ltd share Price Today

The consumer discretionary space is gaining upward momentum after witnessing price and time wise correction. Further, falling metal prices (copper, aluminium) will help to lower inflationary pressure of raw material for AC companies. Key beneficiary of the same will be Voltas. We remain constructive on Voltas as the stock has undergone strong base formation in the vicinity of key support of ₹ 920, which has been held on multiple occasions over the past 15 months. Hence, it offers a fresh entry opportunity with favourable risk reward
 
We expect the stock to resolve higher and gradually head towards ₹ 1084 in coming months as it is confluence of:
a) 38.20% retracement of April-May decline (₹ 1348-922)
b) price parity of May-June rally (₹ 922-1058) projected from mid-June low of ₹ 934
 
On the oscillator front, weekly stochastic logged a bullish crossover, indicating positive bias

Voltas is a home appliances company specialising in air conditioning and air cooling technology in the B2B and B2C space. The company is a market leader with 23.4% market share in the room air conditioner (RAC) as of FY22. Voltas’ key segments include Unitary Cooling Products for Comfort and Commercial use (UCP), Electro-Mechanical Projects and Services (EMPS) and Engineering Products and Services (EPS). UCP is the highest revenue contributing segment for the company
 
Voltas is continuing its focus on expansion through exclusive brand outlets (EBO). Currently, there is a presence of 200 EBOs and the company aims to add 50 more outlets during FY23. The company is also focusing on expansion of Mom & Pop stores for its commercial refrigeration segment which recorded a volume led growth in Q4FY22. On the EPS segment front, growing yarn exports, strong demand for capital machinery in both spinning and post-spinning, and a well-defined approach to strengthening after-sales business are contributing favourably to the topline and results. In FY22, the company achieved a milestone of sale of 1 million units under the Voltbek brand. Production at its Sanand, Gujarat factory also crossed 1 million units with better productivity and high quality. In-house production has aided the brand in introducing more customer-centric products, overcoming supply chain disruptions, optimizing working capital, and achieving additional cost advantages. The company aims to achieve 10% market share by 2025 for the Voltbek brand. Voltas has also entered into a joint venture with Highly International (Hong Kong) Ltd to manufacture compressors in India
 
Voltas reported a muted performance in Q4FY22 wherein total operating income for the quarter was at ₹ 2,667 crore, up by ~1% YoY. The topline growth was mainly affected due to de-growth in EMPS segment. The EMPS segment revenue declined 21% YoY to ₹ 692 crore mainly due to low carry forward order book. The carry forward order book at ₹ 5360 crore declined 19% YoY. Focus on execution of quality orders led to low order booking of the segment. UCP division revenue increased by ~10% YoY to ₹ 1818 crore led by price hikes. Increased completion, pandemic led lockdown and extended winter dragged down overall volume offtake. The volume market share of the company declined to 23.4% (from 25.6% in Q4FY21). EPS segment revenue increased 26% YoY to ₹ 124 crore. This was led by a favourable base and improved performance from crushing & screening equipment and renewal of the service contracts in India and Mozambique. Overall EBITDA margin decreased by 268 bps YoY to 9.8% mainly due to sharp increase in the raw material costs. This resulted ~278 bps YoY fall in gross margin. Consequently, PAT declined ~24% YoY to ~₹ 183 crore
 
In the long run, we expect the company’s market share in the RAC segment to rise owing to rising income and aspirations of middle class household in India which will be a key demand driver for cooling products. We build 17.2% revenue CAGR and 37.5% PAT CAGR for Voltas over FY22-24E. The company has a healthy balance sheet with strong return ratios, wherein the RoE is ~11% and RoCE is ~15% as of FY22

UltraTech Cement Company announced Q4FY24 & FY24 results:

Q4FY24 Financial Highlights:

• Consolidated Net Sales: Recorded at Rs 20,069 crore, a growth of 9% YoY compared to Rs 18,436 crore in the corresponding period of the previous year.
• Profit before Interest, Depreciation, and Tax: Rs 4,250 crore, up 23% compared to Rs 3,444 crore in the corresponding period of the previous year.
• Profit After Tax: Rs 2,258 crore, a rise of 36% compared to Rs 1,666 crore in the corresponding period of the previous year.

FY24 Financial Highlights:

• Consolidated Net Sales: Increased by 12% to Rs 69,810 crore from Rs 62,338 crore last year.
• Profit before Interest, Depreciation, and Tax: Rs 13,586 crore, a growth of 22% compared to Rs 11,123 crore in the previous fiscal.
• Profit After Tax: Rs 7,005 crore, a jump of 38% compared to Rs 5,064 crore in FY23.

Operational Highlights:

• Volume Growth: UltraTech recorded volume growth of 13% during FY24, backed by 11% growth during Q4FY24.
• EBITDA per Metric Ton: Achieved full-year EBITDA per metric ton of Rs 1,101.
• Fuel Prices: Coal and petcoke (fuel) prices witnessed a drop during FY24, with the company's imported fuel consumption cost during Q4FY24 being 13% lower than Q4FY23 and remaining flat QoQ. 
• Capacity Utilization: Effective capacity utilization was 98% during the quarter and 85% for the full year.
• Cash Flows: UltraTech continues to deliver strong cash flows, with the net debt increasing only by Rs 77 crore during FY24 despite spending over Rs 9,400 crore on capex. Over the last five years, UltraTech has delivered a 24% CAGR growth in its earnings per share.

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