UltraTech Cem. (ULTRACEMCO)

FairStock Score: 57/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Strong recent growth: sales growth of 17% and profit growth of 31.6%, with a 5-year revenue CAGR of 11.17%.
• Solid financial health metrics: debt/equity at 0.35, Altman Z-score of 4.86, and Piotroski F-score of 7/9.
• High promoter holding of 59.33% aligns management with minority shareholders.
• Large scale reflected in ₹3.74 lakh crore market cap and latest quarterly sales of ₹21,830 crore.
• Positive net profit of ₹1,729 crore in the latest quarter indicates earning power despite heavy reinvestment.

Concerns

• Extremely rich valuation: P/E of 48.09, P/B of 4.98, and PEG of 5.34 leave no margin of safety.
• Graham Number of ₹3,782.34 versus price of ₹12,167 implies a margin of safety of -235.16%.
• Free cash flow is negative at -₹5,163 crore and current ratio is 0.73, showing capital intensity and liquidity strain.
• Low dividend yield of 0.61% and modest ROE of 10.64% give little compensation for the high multiple.

AI Analysis

At ₹12,167 a share, UltraTech Cem. is a quality business without the margin of safety I need. The numbers show a large, established cement player—₹3.74 lakh crore market cap—with sales growth of 17% and profit growth of 31.6%. A five-year revenue CAGR of 11.17% adds evidence of steady execution. Promoter holding of 59.33% aligns ownership, and a Piotroski F-score of 7/9, debt-to-equity of 0.35, and Altman Z-score of 4.86 point to solid financial health. That is the good part. The bad part is valuation. At a P/E of 48.09 and P/B of 4.98, the market is paying a price that assumes exceptional future growth. But ROE is only 10.64%, and the PEG ratio of 5.34 means the current profit growth is not enough to justify the multiple. Graham's number is just ₹3,782.34, so the current price carries a margin of safety of -235%. In other words, I am being asked to pay more than three times a conservative asset-based value. Free cash flow is negative at -₹5,163 crore, current ratio is 0.73, and the dividend yield is a token 0.61%. Cement is a capital-hungry, cyclical business; negative cash flow and weak liquidity make this lower-quality earnings. The stated EV/EBITDA of 180.78 only confirms how expensive the market has become. As Graham said, price is what you pay, value is what you get. I would keep this on my watchlist, not in my portfolio, until the price gives me a real margin of safety.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer