Kotak Sec, Accumulate ULTRATECH CEMENTS LTD - Target Rs 2,784

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ULTRATECH CEMENTS LTD
 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.2784 FY16E P/E: 21.3X
 Ultratech Cement has agreed to acquire Jaiprakash Associates cement
plants in Madhya Pradesh for Rs 54 bn.
 Transaction is being valued at $176 per tonne while considering that capacity
can further be augmented by nearly 1.8-2.5 MT, valuations comes
at nearly $130-135 per tonne which we believe is attractive.
 We expect this transaction to be positive for Ultratech cements as it will
strengthen its leadership position in the cement market.
 We continue to maintain ACCUMULATE rating on Ultratech Cements with
a revised price target of Rs 2784 based on $170 per tonne on FY16 estimates
(as against Rs 2583 earlier based on $160 per tonne)

http://www.kotaksecurities.com/pdf/dmb/MorningInsight24122014an.pdf