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Ultratech Cemco is India’s largest cement company. Demerger of cement division of Century and its merger into the company provides an opportunity add value through transition of Century brand to premium Ultratech brand resulting in higher realizations. Recent takeover of Binani Cement and Jaypee Cement has been earnings accretive. Prior to the recent covid -19 pandemic cement demand was gradually increasing due to increased infra spend and focus on low cost housing. However, countrywide lockdown has impacted near term performance. As and when the nation reaches normalcy, cement demand will pick up and growth will resume. We have a over weight due to positive management outlook on long term cement consumption and sustenance of cost savings. Main risk factor is rising input and logistics cost – 28-07-2020 Price: 4135.70 Rating: Over Weight Recommendation: Buy

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