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 operational leverage with 31.9% profit growth exceeding 22.8% sales growth
• Market leadership position in cement industry with Rs 3.7L crore market cap
• Robust demand environment driving double-digit revenue expansion

Concerns

• Very high P/E ratio of 48.1 indicating expensive valuation
• Low ROCE of 10.9% for capital-intensive business model
• DhanIQ score of 2/10 suggesting poor risk-reward timing

AI Analysis

UltraTech Cem. is a Cyclical company — meaning its fortunes rise and fall with economic cycles and infrastructure development. Trading at Rs 12,700 with a market cap of Rs 3.7 lakh crore, this cement giant shows the classic signs of a business riding a strong demand wave. The numbers tell an interesting story: sales growth of 22.8% and profit growth of 31.9% indicate robust operational leverage, where increased volumes translate to higher profitability due to fixed cost absorption. However, the P/E ratio of 48.1 suggests investors are paying a premium price for these growth expectations. The ROCE of 10.9% indicates decent capital efficiency, though not exceptional for a capital-intensive industry. With a dividend yield of just 0.6%, the company appears to be prioritizing growth investments over shareholder returns. The DhanIQ score of 2/10 raises red flags about timing and valuation concerns. Analysis suggests this reflects a business at a potentially mature phase of the current cycle, where capacity utilization may be peaking and commodity cost pressures could impact margins. Investors may consider that cyclical stocks require careful timing, as today's growth darling can become tomorrow's earnings disappointment when the cycle turns.

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