UltraTech Cement Share Price Target 2025: Aditya Birla Group Co On Buying Spree - Buy, Sell Or Hold?

UltraTech Cement (UTCEM) has caught the market's attention with its strategic acquisition of an 8.69% non-controlling stake in Star Cement (STRCEM) at a price not exceeding Rs 235 per share.

This move highlights UTCEM's focus on strengthening its presence in the high-growth Northeast region, where STRCEM leads with a 26% market share as of Q2FY25.

UltraTech Cement Share Price Target 2025
According to a report by ANTIQUE Stock Broking Limited, UltraTech Cement is rated as a 'BUY,' with a target price set at Rs 12,800 with the CMP of Rs 11,375.

The brokerage firm highlights STRCEM's profitable foothold in the Northeast market and its aggressive expansion plans as key drivers of this bullish stance.

Why the Northeast Market is Key
The Northeast region offers significant growth opportunities, with cement demand growing at a CAGR of 8-9% over FY19-24, outperforming the pan-India average of 5-6%.

"Owing to logistical constraints/ hilly terrain, the Northeast market has been enjoying better pricing (higher by INR1,000-1,200/t) and in turn profitability as compared to other regions. Many companies in the Northeast have been registering EBITDA/ton of >INR 1,500 on an average over past few years," states the ANTIQUE report. 

Ambitious Expansion Plans
STRCEM plans to nearly double its cement capacity to 15 million tons by 2030. This includes greenfield expansions in North India and additional units in Assam. 
Meanwhile, UTCEM is on track to achieve a cement capacity of 200 million tons by FY27, with an annual organic capex of 120 billion. 

Financial Stability Amid Expansion
Despite its interim rise in net debt, expected to reach INR 120-130 billion by FY25, UTCEM’s robust operating cash flow (OCF) generation of over INR 140 billion annually from FY26 is seen as a stabilizing factor. "While UTCEM net debt is likely to rise to INR120-130bn by FY25 end from less than INR 30bn in Mar'24, OCF generation remains robust with annual OCF of more than INR140bn from FY26. Net debt is likely to fall below INR50bn by FY27 after factoring organic capex and acquisitions of INR400bn over FY25-2," notes the report.

Should You Buy UltraTech Cement?
"Although current investment seems that of financial investment given minority stake purchase, its strategic importance cannot be negated. We maintain BUY rating on the stock with TP unchanged at INR 12,800/sh based on 18x FY27E EV/E. Reiterate UTCEM as our top pick." concludes the report.

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