homemarket Newsstocks NewsUltraTech top bet in cement cos; eye on Birla Corp in midcap space: Nirmal Bang
UltraTech top bet in cement cos; eye on Birla Corp in midcap space: Nirmal Bang
UltraTech Cement posted a mixed set of Q2FY22 earnings. There was a mild beat on the revenue front and volumes are in-line but margin has come in below estimated levels owing to higher expenses. Mangesh Bhadang, Reseach Analyst at Nirmal Bang Institutional Equities, shared his perspective on the company.
UltraTech Cement posted a mixed set of Q2FY22 earnings. There was a mild beat on the revenue front and volumes are in-line, but margin has come in below estimated levels owing to higher expenses. The company reported a net profit of Rs 1,313.5 crore for the quarter ended September 30, marking an increase of 12.6 percent when compared with the corresponding period a year ago. Revenue from operation grew 15.7 percent on a year-on-year basis to Rs 12,017 crore for the quarter under review. Mangesh Bhadang, Reseach Analyst at Nirmal Bang Institutional Equities, shared his perspective on the company.
He said, “It is better to be with UltraTech rather than any other player.”
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He added, “We believe that this is going to be similar for the entire industry. Within the industry if one has to choose one player who can weather this cost storm well, that has to be UltraTech given its size, reach and the kind of skills that they have.”
The company will be passing on the cost increases to the consumers. “In our opinion, that may impact the demand negatively but the impact is going to be more severe on cost as well as on the realization front for other industry players than it is going to be for UltraTech,” he explained.
Within midcaps, the stocks that one needs to look at are Birla Corporation and Sagar Cements, he shared.
“At current prices, I would also look at Ramco Cements. That is the company for which the capex has been over and for the next two-three years they can look at volume growth,” he said.
“Companies we choose are the companies, which are going to show volume growth and which are efficient and have a relatively better reach and brand in the market. Those are the ones one should look at,” he explained.
For the full interview, watch the accompanying video.
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(Edited by : Dipikka Ghosh)
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