UltraTech?s management believes that cement demand is likely to grow at 7-8 per cent with expected double digit growth in H2FY15. This is on the back of renewed focus on infrastructure and initiatives announced in Union Budget to accelerate the demand growth.
The management also highlighted that indirect entry barriers like land acquisition, high capital cost and increasing gestation period due to regulatory clearances may restrict future capacity expansion. This will result into better utilisation and improved realisations. At CMP the stock is trading at P/E of 26.8x FY15E and 20.7x FY16E. The stock has witnessed sharp run in the recent past, and may have such upward trend in future too.