Buy Ambuja Cement; target of Rs 640: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Ambuja Cement has recommended buy rating on the stock with a target price of Rs 640 in its research report dated March 10, 2026.

Broker Research

March 10, 2026 / 12:18 IST

Buy

Prabhudas Lilladher's research report on Ambuja Cement

We visited Ambuja Cement’s Sanghipuram plant in Kutch (Gujarat), one of the largest integrated cement facilities with cement/clinker capacity of ~6.1mtpa/6.6mtpa (two kilns of 9,000tpd and 10,000tpd) and benefits from ~1Bt of high-quality limestone reserves. Management indicated that current operational cement capacity of ~17,000tpd could increase by ~2,500tpd through debottlenecking, taking capacity to ~20,000tpd (~7mtpa). The company has planned ~Rs6bn capex focused on efficiency improvements including WHRS (~18MW). Sanghipuram also benefits from coastal logistics through its jetty, enabling clinker and cement movement to markets such as Tuticorin, Dahej and Mumbai, with logistics costs of ~Rs700/t Vs pan-India average of ~Rs900/t. The plant also has ~130MW captive power capacity, supporting cost competitiveness. Management reiterated its focus on value over volume-led growth and expects further cost reductions ahead (QoQ).

Outlook

We remain constructive on Ambuja’s long-term growth prospects given its initiatives on improving cost efficiencies and ongoing expansion strategy. Maintain BUY with TP of Rs640 valuing the company at 17x EV/Mar’27E EBITDA. At CMP, the stock is trading at 12.5x/10.7x EV on FY27E/28E EBITDA.

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