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Shares of UltraTech Cement Limited traded over 2 per cent higher to Rs 10,278 on Wednesday’s morning trade. This come after the company announced its plan to allocate Rs 32,400 crore for capital expenditure over the coming three years, aiming to expand its operations.
The firm intends to augment its capacity to approximately 200 million tonnes per annum (MTPA) in the near term. In addition, the company has reported the initiation of two new greenfield projects with an aggregate capacity of 5.4 MTPA.
These projects, located in Chhattisgarh and Tamil Nadu, will increase the company’s total capacity to 151.6 MTPA. In the previous year, the cement producer has boosted its capacity by 18.7 MTPA. Additional expansions, amounting to 35.5 MTPA, are presently in progress at 16 sites.
KC Jhanwar, the managing director of the company said that India’s strong growth trajectory provides the cement sector significant headroom for long term growth. Given the consolidated postion in the industry, the company is well placed to support the country in its exciting growth journey ahead, he further added.
Morgan Stanley has assigned an ‘overweight’ call on the stock. With a price target price of Rs 12,000, it implies an upside of 19.5 per cent from the last closing of Rs 10,038. “It continues to be focused on capacity market share gains as it remain key to volumes,” the brokerage said in a note. “Size, pan-India presence and balance sheet strength makes the company best positioned in the industry.”
In late March, the Competition Commission of India (CCI) approved the company’s proposed acquisition of Kesoram Cement business from Kesoram Industries.
At 11:58 am, the stock was trading at Rs 10,077.60, up 0.36 per cent from the previous close on the NSE. The counter has slipped over 4 per cent since the start of the year.
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