JP Morgan downgrades UltraTech Cement, India

JP Morgan downgrades UltraTech Cement, India
Published: 24 July 2012

JP Morgan downgrades UltraTech stock to "underweight" from "neutral" citing "stretched" valuations.

JP Morgan says Ultratech, India's leading cement producer, is trading at 10 times enterprise value/EBITDA and at 18 times P/E.

The U.S. investment bank also lowers its target price to INR1400 from INR1250.

Ultratech Cement on Friday reported a 14 per cent net profit for the April-June quarter.

JP Morgan says prefers to invest in the Indian cement sector via Ultratech parent Grasim Industries, adding the stock is currently trading at a discount of 43 per cent versus the average discount of 29 per cent since 2010.