Europe / Middle East / Africa
JPMorgan downgrades Ultratech, prefers Grasim
Jul, 23 2012
Reuters Market Eye - Despite calling Ultratech Cement(ULTC.NS) "the premier firm in the Indian cement sector," J.P.Morgan downgrades the stock to "underweight" from "neutral" citing "stretched" valuations.
J.P.Morgan says Ultratech trading at 10 times enterprise value/EBITDA and at 18 times P/E.
The U.S. investment bank also lowers its target price to 1,400 rupees from 1,250 rupees.
Ultratech Cement on Friday reported a 13.9 pct rise in April-June quarter net profit.
J.P.Morgan says prefers to invest in the Indian cement sector via Ultratech parent Grasim Industries(GRAS.NS), adding the stock is currently trading at a discount of 43 percent versus the average discount of 29 percent since 2010.
JP Morgan maintains its "overweight" rating on Grasim while raising its target price to 3,062 rupees from 2,700 rupees.
Shares in Ultratech rise 1.5 percent to 1,589.45 rupees, while Grasim falls 0.5 percent to 2,622.90 rupees.
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