Arihant Capital recommended hold rating on Ambuja Cement with a target price of Rs 262 in its research report dated October 26, 2020.
Arihant Capital 's research report on Ambuja Cement
Ambuja Cement has reported good set of numbers during Q3CY20 with strong volume growth and margin beat. Company has posted a volume growth of 8% YoY//35% QoQ in 3QCY20, owing to pent-up demand and strong recovery in rural market. Revenue for the quarter grew by 9% YoY/31% QoQ, driven by strong volume growth and better pricing. EBITDA during the quarter grew by 55% YoY/14% QoQ to Rs 680 cr, largely due to tight control over fixed cost. EBITDA margin improved sharply to 23.9% during the quarter from 16.8% in Q3CY19. Profit for the quarter grew by 88% YoY to Rs 441 cr.
Company has announced an interim dividend of Rs 17/share, resulting into outflow of Rs 3379 cr, implying a dividend yield of 6.7%. We maintain our Hold rating on the stock with a revised target price of Rs 262.
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