Shares of UltraTech Cement (NSE:ULTC) Limited are in focus after the company announced the successful commissioning of multiple brownfield expansions across India, significantly boosting its production capacity.
Major Capacity Expansions Across India
UltraTech Cement has commenced operations at a 3.35 million tonnes per annum (mtpa) clinker facility and a 2.7 mtpa cement mill at its Maihar plant in Madhya Pradesh. The company also confirmed that a second grinding mill at the same facility will become operational in Q1 FY26.
Additionally, UltraTech has expanded its grinding units in Dhule, Maharashtra (1.2 mtpa) and Durgapur, West Bengal (0.6 mtpa). The company has also launched its first bulk terminal in Uttar Pradesh, strategically located in Lucknow, with a handling capacity of 1.8 mtpa.
These expansions have increased UltraTech’s total domestic grey cement capacity to 183.36 mtpa, while its overall global production capacity now stands at 188.76 mtpa.
Valuation Insights: Is UltraTech Cement Overvalued?
Despite its expansion, UltraTech Cement’s current market price (CMP) of INR 11,588 appears stretched compared to its fair value. InvestingPro’s Fair Value tool estimates the stock’s intrinsic worth at INR 9,630.1 per share, indicating a 16.9% downside potential.
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For investors assessing valuation risks, InvestingPro’s fair value analysis helps determine whether a stock is overvalued or undervalued. By utilizing multiple financial models, InvestingPro provides highly precise valuations, aiding investors in making informed decisions.
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While UltraTech Cement remains a strong player in the cement sector, the fair value analysis suggests that investors should be cautious at current price levels. A correction could provide a more attractive entry point for long-term investors.
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