UltraTech cement tops Rs 10,000, ends day below peak. Should you buy?

UltraTech Cement shares recently crossed the Rs 10,000-mark for the first time, but closed a bit lower at Rs 9,748 on the same day. The stock's new lifetime high is Rs 10,042. While there might be some near-term consolidation, brokerages have an optimistic outlook on UltraTech Cement.

According to technical analysts, the stock is currently overbought, and there is a strong resistance zone at the 9,850-10,050 range. Investors are advised to be cautious, and some are recommending booking profits at current levels. A daily close below the support of Rs 9,635 could potentially lead to a near-term target of Rs 8,745.

Avdhut Bagkar, a derivatives and technical analyst, points out that the stock has entered the overbought territory of the Relative Strength Index (RSI) on the daily chart. The trend is projected to strive for the 11,000 mark if the support of Rs 9,500 is protected.

Despite these short-term concerns, brokerages, such as Axis Securities and Sharekhan, have a positive outlook on UltraTech Cement. Axis Securities projects a Compound Annual Growth Rate (CAGR) of 12% in revenue, 21% in EBITDA, and 30% in adjusted profit after tax (APAT) from FY23 to FY26E. The brokerage has a buy rating on the stock with a target of Rs 10,850.

Analysts are also positive about UltraTech's recent acquisition of Kesoram Industries' cement business, as it is expected to boost production capacity and expand the company's presence in the western and southern markets.

Disclaimer: It's important for investors to consider the conflicting viewpoints and assess their risk tolerance. While short-term technical indicators suggest caution, the positive long-term outlook from brokerages highlights the potential for growth. As always, investors are advised to do thorough research or consult with financial experts before making any investment decisions.