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UltraTech Cement: Buy UltraTech Cement is a good investment option for investors with a one/two-year perspective. A focus on the promising Western region, a first-mover advantage in capacity additions and substantial captive power capacities make UltraTech a preferred exposure within the cement sector. At its current market price of Rs 775, the stock trades at nine times its estimated 2009-10 earnings, at a discount to peers such as ACC and Ambuja Cement (12-13 times their estimated FY10 earnings). UltraTech’s sales and profits have grown at a compounded annual rate of 25 per cent and 44 per cent respectively in the last four years. The company has benefited from the Western region’s strong demand for cement, reporting an 18 per cent surge in domestic volumes and 91 per cent jump in export volumes in the June quarter. UltraTech also has a smaller presence in Southern and Central markets. The Rs 3.5-lakh-crore of industrial investments slated for Gujarat and the revival of cement export...

UltraTech Cement has reported a 58 per cent jump in net profit in the first quarter ended June 30, 2009 largely due to increase in volume growth and fall in operational costs. Mr K.C. Birla, Chief Financial Officer, UltraTech Cement, said the net profit was boosted by the 14 per cent rise in production at 4.52 million tonnes and fall in variable cost, including power and coal. “The company has access to about 236 MW of captive thermal power, catering to 80 per cent of its requirements,” he added. The domestic realisation was up 10 per cent at Rs 216 for a 50-kg bag over the last sequential quarter, while in the export market prices fell by three per cent. The coal cost in the quarter was substantially lower at $85 a tonne. The capacity utilisation remained flat at 95 per cent on expanded capacity. The company’s capacity was 23.10 million tonnes following the commissioning of an additional 1.2 million tonnes at Andhra Pradesh Cement Works. The company proposed to invest Rs 2,000 crore i...

NTPC: Buy (The Hindu Business Line 25th Feb 2008)Investors seeking a defensive play in the run-up to the Budget can consider putting their money into the NTPC stock. The stock is now trading at more reasonable valuations compared to the peak of the market euphoria over power stocks barely a month ago. At the current market price of Rs 197, the stock trades at 20 times the projected earnings for 2007-08; down from over 26 at its height. While the pace of appreciation from current levels could be slower compared to the recent past, the downside appears minimal. There’s likely to be little in the Budget to affect the stock adversely; if anything, it could make things brighter for the company through a sharper focus on the power sector accompanied by higher allocations. NTPC plans to scale up its present capacity of around 27,000 MW to over 50,000 MW in the next five years. The company will also be commissioning by early-2009 its first hydro power plant at Kol Dam in Himachal Pradesh. Mor...