Ambuja Cements Ltd. share price target

Post lockdown, rural demand and construction sectors are expected to pick up gradually, with normal monsoon and Government policy support measures. We maintain our HOLD rating on the stock with a revised target price of Rs. 180 based on 7.0x CY21E EV/EBITDA. Topline impacted on volumes but margins continue to expand Ambuja Cements recorded 8.5% YoY decline in Q1CY20 consolidated revenue to Rs. 6,250cr, as sales volumes were impacted in Mar-2020 amidst Corona-led lockdowns (company witnessed volumes growth till Feb). Cement volumes fell 11.9% YoY to...

Ambuja (ACEM) Q1CY20 EBITDA came in-line with our estimate of Rs6bn. Decline in cement sales volume by 10% YoY is on expected line. As until February ACEM has seen good volume growth but lockdown impacted March month sales volume. EBITDA/t at Rs1046 up +44% YoY is driven by higher cement prices +7% YoY and lower fuel cost (down 12% YoY). From 20th April, ACEM has commenced operations at few of its plants. Company expects weakness in the demand to be arrested by normal monsoon and policy support measures taken by the Government and RBI. Company's net cash balance sheet (Rs31bn) provides it with cushion from any extended period of weak...

EBITDA rose 30% YoY (+10% QoQ) to INR6.0b, despite lower volumes, led by a 7.0% YoY increase in realization to INR4,900/t (est. We see limited share price upside in ACEM from current levels, given the expected margin pressure due to the expiry of its incentives at Maratha Cement Works as well as a fixed cost addition next year from its new plant at Marwar Mundwa. Mr Akhoury was earlier the MD and CEO of Ambujas subsidiary ACC, wherein he is credited with arresting market share decline for the company after a gap of 10 years, as well as implementing strong cost control. As a result, we expect ACEMs EBITDA per ton to be marginally lower in the next two years and underperform We see a limited share price upside from current levels, given the expected margin pressure due to the expiry of its incentives at Maratha Cement Works, as well as a fixed cost addition next year from its new plant at Marwar Mundwa.

Plants and warehouse resumed operations at limited scale wef 20th April Ambuja Cement (ACEM) delivered strong set of Q1CY20 earnings with 13% beat in EBITDA, led by better than expected realisations and lower RM costs. India's cement demand has been under pressure since Q1FY20 due to dearth of liquidity, weak sentiments and low Govt spending. With the outbreak of novel covid-19 virus, India's cement demand is expected to fall 3% YoY in...

Recommendations and stock picks: We upgrade Ramco Cements to BUY (from ADD earlier) and Shree Cement to REDUCE (from SELL earlier), post the recent stock price corrections. We maintain BUY ratings on all other stocks. We prefer UltraTech among pan India players and NCG exposed JK Cement and JK Lakshmi in midcaps. The SEM based companies (especially Dalmia) are also trading at attractive valuations post recent stock decline and should see rerating as demand recovery accelerates in 2HFY21 onwards. Sales hit hard in the peak quarter: The Covid-19 led countrywide shut downs in late March pulled down cement sales during 4QFY20. We estimate sales volume for our coverage universe to fall 10% YoY (+2% QoQ). In our view, the lockdown eroded ~15-20% of expected sales for 4QFY20.

Performance Beat on Better Volume & Cost Reduction Ambuja Cements (ACEM) has delivered a strong performance in 4QCY19, which was ahead of our estimates, mainly led by higher-than-expected sales volume and cost reduction. Reported EBITDA grew by stellar 47% YoY to Rs4.5bn (excluding Rs979mn other operation income) vs. our estimate of Rs4bn, while EBITDA/tonne stood at Rs687 vs. Rs498 and Rs707 in 4QCY18 and 3QCY19, respectively. Sales volume grew by a strong6.7% YoY to 6.54mnT (vs. our estimate of 6.3mnT), while average realisation declined by 5% QoQ (+3% YoY) to Rs4,645/tonne. A meaningful sequential reduction in operating cost/tonne to Rs3,958 (-1.4% YoY and -5.3%...

Performance Beat on Better Volume & Cost Reduction Ambuja Cements (ACEM) has delivered a strong performance in 4QCY19, which was ahead of our estimates, mainly led by higher-than-expected sales volume and cost reduction. Reported EBITDA grew by stellar 47% YoY to Rs4.5bn (excluding Rs979mn other operation income) vs. our estimate of Rs4bn, while EBITDA/tonne stood at Rs687 vs. Rs498 and Rs707 in 4QCY18 and 3QCY19, respectively. Sales volume grew by a strong6.7% YoY to 6.54mnT (vs. our estimate of 6.3mnT), while average realisation declined by 5% QoQ (+3% YoY) to Rs4,645/tonne. A meaningful sequential reduction in operating cost/tonne to Rs3,958 (-1.4% YoY and -5.3%...

Ambuja Cements witnessed revenue growth of 5.9% YoY to Rs, 7,126cr, driven primarily by 5.1% YoY growth in volumes in Q4CY19. This growth was partially offset by rise in cost of materials consumed which grew significantly by 26.9% YoY to Rs. 885/ton. Also, employee expenses rose 5.2% YoY to Rs. 286/ton. On a positive note, power, freight and other expenses reduced by 9.0%, 7.2% & 9.8% YoY, respectively. Cement realization remained flat (+0.7% YoY). Resultantly, EBITDA per ton grew...

24 February 2020 Ambuja Cements (ACEM) 4QCY19 result reflected normalized cost (after a sharp increase in 3Q) which offset weaker realization, resulting in sequentially flat EBITDA/ton of INR837. While volume growth is likely to improve from CY21 driven by new capacity, we expect margins to be weak due to expiry of fiscal incentives at its Maratha plant. We maintain our CY20/21 estimates and rating. The fourth quarter operating result was in line, with revenue/EBITDA/PBT up 10%/36%/48% YoY at INR31.4b/INR5.5b/INR4.4b. It has adopted a new tax rate of 25.17% and written back INR1.03b of deferred tax liability, resulting in a beat on PAT at INR4.5b (-15% YoY). While volume increased 7% YoY to 6.54mt, realization declined 4% QoQ to Unitary cost declined by 5% QoQ as expected to INR3,958/t (-1% YoY) resulting in flat EBITDA/t QoQ at INR837 (+27% YoY), despite lower realization. EBITDA margin came in at 17.

Ambuja Cements reported a strong set of numbers, broadly beating I-direct estimates. Topline growth came in at 9.5% YoY to | 3,136 crore (I-direct estimate: | 3,005 crore), mainly led by 6.7% volume growth to 6.54 MT (Idirect estimate: 6.12 MT). Realisation grew 2.7% YoY to | 4,795/t (I-direct estimate: | 4,910/t). Profitability improved led by higher realisations and controlled production costs. EBITDA margin was at 17.5%, expanding 335 bps YoY (I-direct estimate: 17.5%). EBITDA/t for the quarter increased 27% YoY to | 837/t (I-direct estimate: | 860/t). Total costs per tonne by 1.4% YoY mainly driven by reduction in P&F; and freight costs, offset partly by higher...