Ambuja Cements (ACEM) delivered better-than-estimated 4QFY25 results on lower cost (2% below estimate) and higher realization (3% above estimate). Consol. EBITDA increased 10% YoY to INR18.7b (vs. estimated INR14.4b), and EBITDA/t stood at INR1,001 vs. estimated INR752. Adjusted profit after MI was down ~16% YoY to INR4.5b (vs. estimated INR3.8b). The management reiterated that cost reduction guidance of INR500/t (incl. INR150-170/t achieved till now) by FY28E and aims to achieve EBITDA/t of INR1,500 by FY28E. ACEM’s capacity expansion plans remain on track, and it will have a cement capacity of 140mtpa by FY28E. Most of the capacity expansion in FY26 will be through organic routes, though management is not averse to inorganic plans.
OutlookWe would monitor ACEM’s earnings trajectory, as in the last few quarters, its EBITDA/t has been more volatile than its peers. The stock trades at 21x/16x FY26E/FY27E EV/EBITDA. We reiterate our BUY rating with a TP of INR 620 (valuing the stock at 18x FY27E EV/EBITDA).
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