Reliance Securities is bullish on Ambuja Cements has recommended buy rating on the stock with a target price of Rs 310 in its research report dated February 21, 2018.
Reliance Securities's research report on Ambuja Cements
Ambuja Cements (ACL) has reported a better-than-estimated operating performance in 4QCY17, mainly owing to higher-than-expected volume growth and better operational efficiencies.Operating profit grew by sharp 48% YoY and 39% QoQ to Rs4.4bn vs. our estimate of Rs3.9bn. Despite a sharp spike in Power & Fuel cost/tonne and freight cost/tonne, operating cost/tonne declined by 1% YoY and 6% QoQ to Rs3,681, led by cost optimisation initiatives.
OutlookWe expect ACL to get decent traction on the back of strong brand equity, premium product portfolio, value-based pricing and expected pick-up in demand. We maintain our BUY recommendation on the stock with a revised SOTP-based Target Price of Rs310 (from Rs320 earlier).
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