Ambuja Cements has fallen 31 per cent so far in 2023, tracking steep declines in other Adani Group stocks. The cement maker reported a 46 per cent rise in net profit for the December quarter. The brokerage said the quarterly results beat their expectations on higher volumes and cost optimization was bearing fruit, but they have different price targets. A handful of brokerages have set a high target of Rs 570 and a low level of Rs 375 on the counter.
JM Financial, which has kept a target price of Rs 570 on the stock, said the group is playing synergy with focus on cost optimization. It is felt that the EBITDA per tonne for Ambuja Cements has built a base and is becoming tangible due to declining trend in fuel cost due to coal contracts, integration with other Adani group companies, and pick up in broad based demand. has given shape. Improvement starts from there.
“With a well-established pan-India network and high capacity utilisation, we feel Ambuja Cements can drive volume growth in cement and value-added products through new capacity. We maintain ‘Buy’ rating and ‘Buy’ rating for September 2023. 570 (48 per cent). Upside) quoting the standalone business (premium to 10-year average; in line with Shree Cement’s historical multiples) at 21x EV/EBITDA, as we believe growth Nowhere higher than in the past,” the brokerage said.
The Adani Group firm reported a 46 per cent jump in net profit at Rs 369 crore for the December quarter, as against Rs 253 crore in the year-ago period. Ambuja Cements said its revenue for the quarter grew 11 per cent to Rs 4,129 crore from Rs 3,740 crore in the corresponding quarter last year.
On Thursday, the stock fell 5.4 per cent to Rs 363.60 on the BSE.
Motilal Oswal said Ambuja Cements’ quarterly results beat its estimates by a margin, but the brokerage has a target price of Rs 375 on the stock. This is because it reduced its FY25E EPS by 20 per cent on account of issuance of convertible warrants to the promoter group entity, which were subscribed by Motilal Oswal and converted into equity shares in FY25E. The brokerage rates the stock at 15 times Sep 2024E EV/Ebitda.
Yes Securities has ‘ADD’ rating on the stock with a target of Rs 434. It added that the company’s focused efforts towards efficiency will bridge the valuation gap with the leaders. The brokerage rates Ambuja Cements at 14x EV/Ebitda on SOTP based valuation and 10x EV/Ebitda on FY25E basis with standalone entity valuation of ACC stake.