UltraTech Cement shares cross Rs 10,000-mark but closes lower: What should investors do?

According to Axis Securities, Ultratech is set to post CAGR of 12% in revenue, 21% in EBITDA, and 30% in adjusted profit after tax (APAT) over the period from FY23 to FY26

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UltraTech Cement’s share price crossed the Rs 10,000 mark for the first time on December 13 but closed the day a tad lower at Rs 9,748. The stock’s new lifetime high is now Rs 10,042.

According to technical analysts, the support at Rs 9,500 needs to be protected going ahead as the stock has entered an overbought territory.

“UltraTech Cement looks overbought and bearish on the daily charts with a strong resistance zone at the 9,850-10,050 range. Investors should be booking profits at current levels as a daily close below support of 9,635 could lead to a target of 8,745 in the near term,” said AR Ramachandran of Tips2Trade.

Also read: UltraTech Cement aims to use 85% green energy by 2030

Avdhut Bagkar, derivatives and technical analyst, StoxBox concurs. “The stock has entered the overbought territory of the Relative Strength Index (RSI) on the daily chart. Until the support of 9,500 is protected, the trend is projected to strive for the 11,000 mark.”

While there might be some near-term consolidation, brokerages have an optimistic outlook on the stock.

According to Axis Securities, Ultratech is set to post a CAGR of 12 percent in revenue, 21 percent in EBITDA, and 30 percent in adjusted profit after tax (APAT) over the period from FY23 to FY26E. The brokerage has a buy rating on the stock with a target of Rs 10,850.

Analysts are also positive about UltraTech’s recent acquisition of Kesoram Industries’ cement business. This move will boost UltraTech’s production capacity and expand its presence in the rapidly growing western and southern markets, they said.

“The company remains on track concerning its capacity expansion plans through organic and inorganic routes. Industry consolidation and cement price hikes undertaken during September and October provide better pricing discipline and strong operational profitability growth tailwinds for the company,” said domestic broking firm Sharekhan.

It has a buy rating on the stock, with a target price of Rs 10,500.

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