Sell Ambuja Cements: Indiabulls Securities

ALSO READ See previous views by Indiabulls Securities Research See what other Experts & Brokerages are saying about Ambuja Cements See messages about Ambuja Cements Ambuja Cements BSE | NSE 10/02/12 Are Mutual Funds betting on Ambuja Cements?

Indiabulls Securities Research has come out with a research report on Ambuja Cements . The research firm has recommended a sell rating on the stock, in its report dated November 17, 2009.

"We have arrived at a fair value estimate of Rs 81 per share for Ambuja using a combination of DCF-methodology, relative valuation, and replacement cost. Our fair value estimate takes into account our concerns regarding the effects of significant capacity additions in the industry, healthy demand growth for cement, the cost savings from the commissioning of the Company's clinkerisation plants and captive power plants. The company is currently trading at a PE multiple of 10.8x which is at a premium (11%) to the industry average of 9.8x. Thus, we recommend a sell rating on the stock", says Indiabulls Securities Research.

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