Nomura cut the target price for Ambuja Cements to 240 from Rs 295 as it sees may see the lowest volume/earnings growth among largecap peers
Cement majors Ambuja Cements, ACC and Shree Cement fell 2 percent, 0.9 percent and 0.87 percent, respectively, intraday on June 13 after Japanese brokerage firm Nomura downgraded them to neutral from buy.
Nomura cut the target price for Ambuja Cements to 240 from Rs 295 as it sees may see the lowest volume/earnings growth among largecap peers.
"Company appears to be least geared for an upcycle. We expect a modest 4.2 percent volume CAGR over the next two years," Nomura said, adding in next two years, the company may see standalone earnings at 12 percent CAGR against 27 percent for its peer ACC.
In case of Shree Cement, the brokerage raised price target to Rs 21,500 from Rs 18,000 earlier as earnings outlook look good though valuations are becoming expensive.
Nomura believes cement is in an upcycle, but upside is limited. We expect two-year EPS CAGR of 40 percent, it said.
The brokerage also raised price target for ACC to Rs 1,750 from Rs 1,700 earlier.
"We see 27 percent earnings CAGR over two years, but may be at risk if price increase is lower. With capacity utilisations at 90 percent, cycle upside benefits seem limited," it said.At 1018 hours IST, Shree Cements was down 0.40 percent at Rs 20,465, ACC down 0.49 percent at Rs 1,571.60 and Ambuja Cements fell 1.25 percent at Rs 217.95 on the BSE.The Great Diwali Discount!
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