ET Intelligence Group: Over the past five years, cement marketing has changed. Cement sales teams across the industry have often humbled top consumer companies in the race to hire the best talent, and the word ‘brand’ has become central to pricing and product strategies in an industry that makes the world’s most-used manufactured commodity.
UltraTech, the biggest in business, is the face of this industry makeover.
Like consumer staples that harness numerous power brands to justify valuations covering earnings five decades into the future, UltraTech is beginning to command premiums analysts typically assign to FMCG companies. In the past two years, the valuation gap between UltraTech and companies constituting the Nifty Consumption Index has halved.
Overseas, cement is treated as a part of the building material space and trades at PEs similar to those in commodities industries. The current PE multiple ascribed to Ultra-Tech seems to suggest the Indian market perceives cement as a branded product.
UltraTech is trading at 50 times trailing and 38 times one-year forward earnings. That translates into a premium of 111 per cent to the Nifty’s valuation. By comparison, Zurich-based LafargeHolcim, which owns ACC and Ambuja CementsNSE -0.2 ..
UltraTech leads its global rivals in growth estimates, underscoring its pricing power in a cement market that is the world’s second-biggest after China. Ultra-Tech’s projected earnings growth for FY20 is 31.9 per cent, compared with a range of 5-27 per cent for its overseas peers. The PEG ratio — a measure of price-earnings per unit of growth — at UltraTech is 1.27, while for top global companies it is 1.8.
This optimism reflects the return of pricing power in India’s cement sector afte ..
UltraTech, the biggest in business, is the face of this industry makeover.
Like consumer staples that harness numerous power brands to justify valuations covering earnings five decades into the future, UltraTech is beginning to command premiums analysts typically assign to FMCG companies. In the past two years, the valuation gap between UltraTech and companies constituting the Nifty Consumption Index has halved.
Overseas, cement is treated as a part of the building material space and trades at PEs similar to those in commodities industries. The current PE multiple ascribed to Ultra-Tech seems to suggest the Indian market perceives cement as a branded product.
UltraTech is trading at 50 times trailing and 38 times one-year forward earnings. That translates into a premium of 111 per cent to the Nifty’s valuation. By comparison, Zurich-based LafargeHolcim, which owns ACC and Ambuja CementsNSE -0.2 ..
UltraTech leads its global rivals in growth estimates, underscoring its pricing power in a cement market that is the world’s second-biggest after China. Ultra-Tech’s projected earnings growth for FY20 is 31.9 per cent, compared with a range of 5-27 per cent for its overseas peers. The PEG ratio — a measure of price-earnings per unit of growth — at UltraTech is 1.27, while for top global companies it is 1.8.
This optimism reflects the return of pricing power in India’s cement sector afte ..
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