Ambuja Cements Ltd. share price target

We value ACL at 13x CY23E EV/EBITDA (including Ambuja stake in ACC with no holding company discount) to arrive at the TP of Rs 405/share, implying an upside of 11% from the CMP and maintain our BUY rating on the stock.

We maintain our BUY rating on the stock with a revised TP of Rs 4,350/share (which includes Rs 275/share for the company's stake in PMAG) as we value the stock at 17x its FY24E EPS. TP implies an upside potential of 13.5% from the CMP.

Demand outlook seems positive for the coming months and should aid topline growth further, while margins may remain stressed in the near term. We reiterate our HOLD rating on the stock with a revised target price of Rs. 362 based on 8.5x CY23E EV/EBITDA. Demand drives topline, EBITDA margin shrinks on cost inflation Ambuja's revenue grew 14.7% QoQ to Rs. 28,965cr (+2.3% YoY) despite volume growth remaining flat during the quarter owing to tepid demand growth during November. Gross profit margin contracted to 59.1% (-637bps YoY, -876bps QoQ) due...

Volumes covered under Master supply agreement (MSA) increased 70% YoY Ambuja Cement (ACEM) reported weak Q4CY21 earnings. EBITDA fell 26% YoY to Rs5.7bn, below our/consensus estimates by 16%/20%. Miss was on account of higher than expected energy cost and other expenses. ACEM's...

We value ACL at 13x CY23E EV/EBITDA (including Ambuja stake in ACC with no holding company discount) to arrive at TP of Rs 365/share, implying an upside of 8% from CMP and hence change our rating from BUY to HOLD

In the phase II, the company plans to reach over ~50 MT capacity through capacity expansion in western region along with significant de-bottlenecking Q4CY21 Results: Ambuja Cements' Q4CY21 results remained below estimates. Revenues were up 6.3% YoY to | 3735 crore. Sales volumes were at 7.16 MT (up 2.1% YoY, 15.5% QoQ). Sequential growth was led by stabilisation...

As expected, increased opex (up 14% YoY) dented profitability. EBITDA fell 26% YoY, while adjusted profit (adjusted for an additional charge on restructuring cost) fell 40% YoY. We reduce our CY22E/CY23E EBITDA estimate by 15%/5%, considering a steep increase in energy costs. Our profit estimate for CY22E is being cut by a mere 6% (despite higher reduction in EBITDA), considering the higher dividend income from ACC. We reduce our CY23E profit estimate by 5%. The company has announced plans for increasing grinding capacities by...