Ambuja Cements Q2 Results Review - Growth Expected In H2; Retain 'Hold': IDBI Capital

IDBI Capital Report

Ambuja Cements Ltd.’s Q2 FY25 Ebitda came higher than consensus estimates by 30%. This is primarly due to cost reduction . Ambuja Cements is expected to increase its capacity by 27% / 11% in FY25E and FY26E and currently the expansion program is on track. The company is also planning to reduce opex and improve Ebitda by various methods. We retain Hold rating on Ambuja Cements with a revised target price at Rs 600 valuing it at 32 times FY26 enterprise value/Ebitda and its ACC stake is valued at 20% discount to current market price. Overall capex intensity to remain high.

For FY25E, capex would be at Rs 70 billion, of which company has utilized 50% till H1 FY25. The capacity expansion plan of 140 million tonnes per annum will be funded by internal accruals and operating cashflows, the targets are set to reach 100mtpa by FY25, 120 mtpa by FY26 and 140 mtpa by FY28.

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