UltraTech Cement, a leading cement manufacturer in India, fell 2.5% on Monday, underperforming the broader market. The stock price decline came despite the company’s strong quarterly earnings report, which showed a 22% increase in net profit and a 15% rise in revenue. The company’s operating profit also increased by 23% year-over-year, driven by higher sales volumes and better realizations.
However, the stock fell due to concerns over the company’s high debt levels and its ability to deleverage. UltraTech Cement’s debt-to-equity ratio stands at around 0.9, which is higher than its peers. Investors are worried that the company may struggle to reduce its debt in the near term, which could impact its financial performance and ability to pay dividends.
Despite the stock’s decline, analysts remain positive on the company’s long-term prospects, citing its strong market position, improving operating efficiency, and increasing demand for cement in India. The company is also expected to benefit from the government’s infrastructure development plans and the growth of the real estate sector.