Ambuja Cements Ltd. share price target

Ambuja Cements’s consol. EBITDA grew 37% YoY (2% lower QoQ) to Rs17bn, marginally below our expectations (Emkay: Rs17.3bn). Ambuja continues making significant strides towards becoming the lowest-cost cement producer, having achieved ~Rs180/t reduction QoQ in total costs, in Q4. Ambuja targets total cost/t of Rs3,650 by FY28 (a >Rs500/t reduction).

Ambuja Cement (ACEM)’s standalone EBITDA was up 1% YoY to INR8.0b (vs.
est. of INR9.3b). EBITDA/t came in at INR837 (est. INR1,038) and OPM stood
at 16.7% (vs. est. 19.8%). PAT (adjusted for loss on the sale of Sanghi’s share
in open market) was INR5.4b (vs. est. INR6.3b).

Monthly Economic Buffet: Economic Round-up January 2024. SBIN: Pension one-off hurts profitability. JSTL: Progressing on expansion but valuations fair. ACEM: Healthy quarter, sustainability key; retain HOLD. ALPM: Healthy quarter; PAT beat on low tax rate. CPBI: Margin stress across segments. VSTT: Poor demand dampens performance

We maintain our HOLD recommendation on the stock and roll over our estimate to FY26 as recent appreciation in the stock price leaves us with no upside.

Standalone Q2 revenue grew just 8% YoY (-16% QoQ) as net volumes dropped 9% (-18% QoQ)