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Misses - Commodities

ICICIdirect Research 23 Oct 2026 DISCLAIMER

UltraTech Cement (CMP – Rs 10,965, PT – Rs 12,920, Reco – Buy)

Overall operational performance during the quarter was impacted, mainly due to muted grey cement realizations and higher fuel and packaging costs. Volume growth of 12.9% YoY in Q2FY27 was largely in-line with expectations. EBITDA/ton increased by only 6.5% YoY (-20% QoQ) to Rs 974/ton, on account of 5.5% QoQ fall in grey cement realization along with higher cost structure. Going forward, management remains confident of growing volumes in double-digits and reaching Rs 1400/ton by FY28E despite near term cost pressure. We also believe that, though near-term profitability may get impacted due to elevated fuel prices, longer-term profitability outlook remains intact considering the pick-up in cement prices and company’s cost saving measures. We estimate ~10% volume CAGR and EBITDA/ton of Rs 1301/ton by FY28E. In wires & cables segment, management remains optimistic of gaining market share gradually over the next few years and revised potential revenue number to Rs 16000-17000 crore considering higher copper prices. We believe that other domestic players in wires & cables industry (like Polycab, KEI Industries) may face some competitive pressure in the coming period

Shree Cement (CMP – Rs 22,750 , Reco – HOLD)

Overall operational performance during the quarter was impacted, mainly due to muted realizations and higher fuel and packaging costs. Though volume growth of ~18% YoY in Q2FY27 was healthy due to ramp-up of recently added capacities, EBITDA/ton decreased by 15.2% YoY (-10.9% QoQ) to Rs 912/ton, on account of flattish (+0.8% YoY) realization along with higher cost structure. Going ahead, we believe that there might be some pressure on margins led by higher fuel and packaging costs due to West Asia war uncertainty, but performance should gradually improve over Q4FY27-28E. On capacity front, total cement capacity stands at ~70 mtpa and targets to reach total cement capacity of ~80 mtpa by FY28E/29E which gives longer term growth visibility. Management has also given volume guidance of ~40 mtpa for FY27E (which implies ~10% YoY growth)

Jindal Stainless (CMP – Rs 684, Reco – Buy)

Jindal Stainless reported a muted performance in Q2FY27 amid relentless import pressure. Sales volume for the quarter came in at 6.64 lakh tonne (up 2.5% YoY), while EBITDA/tonne moderated to ₹ 21,568/tonne, down ~₹ 1,320/tonne QoQ. Company has lowered its sales volume guidance of 7-9% for FY27E to 4-6% while upgrading its EBITDA/tonne guidance from ~₹ 18-20K/tonne to ~₹20-22k/tonne amid rising share of value-added products. Structurally, we remain positive on the company given the increasing application of stainless steel domestically & JSL’s leadership in this space. Stock trades inexpensive at ~8x EV/EBITDA on FY29E. Our last rating was BUY on the stock with a target price of ₹ 915.

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