Buy Ambuja Cements; target of Rs 349: Arihant Capital
Arihant Capital is bullish on Ambuja Cements has recommended buy rating on the stock with a target price of Rs 349 in its research report dated February 23, 2021.
February 23, 2021 / 02:24 PM IST
Arihant Capital's research report on Ambuja Cements
Ambuja Cement Limited reported good set of numbers for Q4CY20. Revenue from operations grew by 12.1% YoY and 23.6% QoQ to INR 3515 crore above our estimates of INR 3355 cr backed by good growth in volume & realization growth . Sales volume grew by 7.2 % YoY and 23.6% QoQ to 7.01 mn tons. Realization/ton grew by 4.6% YoY, however declined marginally by 0.3% to INR 5014 per tonne against our expectation of INR 4794 per tonne.
We value the standalone business to 16x to its CY22E EBITDA and arrive at a fair value of INR 281/share while Ambuja’s 50% stake in ACC has been valued at INR 68 per share (based on our ACC’s TP of INR 2042). Our SOTP valuation yields a fair value of INR 349 per share. We upgrade our rating from Hold to Buy on stock.
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