Shares of UltraTech Cement declined more than 5% on Friday, a day after the company's board approved Rs 12,886 crore capex plan. "The Board of Directors at its meeting held today, approved capex of Rs. 12,886 crores towards increasing capacity by 22.6 mtpa with a mix of brown field and green field expansion," the company said in a regulatory filing on Thursday 

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This would be achieved by setting up integrated and grinding units as well as bulk terminals. The additional capacity will be created across the country.  

Though the shares declined on Friday, global brokerage houses have been bullish on the stock of the country's largest cement maker. Of all the brokerages, the most aggressive target for an upside of over 46% was put out by Morgan Stanley. 

Morgan Stanely retained its 'overweight' rating with target price of Rs 8800 per share. 

Global Brokerage firm CLSA maintained a buy call on the cement stock with a target price of Rs 7640, which translates into an upside of % on June 2 closing price of Rs 6007.85 per share.  

CITI and Goldman Sachs were also bullish on the stock and maintained a buy rating with target prices of Rs 7600 and Rs 7070 respectively.  

Meanwhile, domestic brokerage firm Motilal Oswal said while we are not changing our long-term positive view on the sector, we expect Cement stocks to underperform in the near term. However, the brokerage maintained a buy call saying that Capex announcement will help the company achieve a domestic Grey Cement capacity of 153.5mtpa by. It expects the company to turn net cash positive in FY26 fresh capex announcement. 

At a target price of RS 7825, It sees an upside of 30% on yesterday's closing price. 

Meanwhile, Centrum Broking feels the margin will remain under pressure for cement companies as the demand is slowing down in May and monsoon is only round the corner.  

"As a result, cement companies are expected to witness lower volume QoQ in Q1FY23," it said.  

Q4FY22 for cement companies witnessed gradual rebound in cement demand, particularly during Feb and Mar 2022, which led to higher volumes but average realisation was largely flat QoQ, it observed. 

"Coal prices are expected to be elevated level will increase further in Q1FY23. The cement companies increased prices during April 2022 but is not sufficient to cover increase in coal/pet coke prices," says Centrum Broking.   

As per the brokerage firm, the inability to pass on the cost fully to customers remains the primary concern for the sector. "We expect cement margins to decrease on a QoQ basis due to lower volume and higher coal prices," it said.  

Meanwhile, the counter was trading near its 52-week low to Rs 5,631, which the shares traded on March 8, this year. Around 1:15 pm on Friday, the stock declined 5.25% to trade at Rs 5692.25 per share on the BSE.