Hold Ambuja Cements; target of Rs 480: Emkay Global Financial

Hold

Emkay Global Financial's research report on Ambuja Cements

In Q1FY24, Ambuja Cements’ (Ambuja) standalone EBITDA rose by 23% YoY and ~13% QoQ to Rs9.5bn, with EBITDA/ton at Rs1,040, in line with our estimates. Management has reiterated its key focus areas: i) Doubling of capacity from ~68mt to 140mt by FY28; ii) The group has set forth a target to set up 40mt clinker capacity (~10 lines) with 35 new grinding units to achieve capacity target by FY28; iii) The company is aiming EBITDA/ton of Rs1,450- 1,500 by FY28 by optimizing manufacturing, logistics cost and through group synergies. Factoring in lower opex/ton, we have increased our FY24E-25E EBITDA estimates by 4-5% and target EV/E multiple by one notch to 16x.

Outlook

Additionally, factoring in the increase in ACC’s TP, we have raised our Jun-24 TP to Rs480/share post the quarterly roll-over

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Ambuja Cements - 04 -08 - 2023 - emkay