Ambuja Cements Q2 Review - Beats Estimates; Focus Remains On Cost Optimisation; Maintain Buy: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Ambuja Cements Ltd.’s Q2 FY25 earnings beat estimates, led by higher volumes (4% above estimates) and higher incentive incomes. Consolidated Ebitda declined 15% YoY to Rs 11.1 billion (38% beat; however, Ebitda adjusted for incentive income of Rs 1.4 billion was ~21% above our estimates). Ebitda/tonne stood at Rs 780 (versus estimate Rs 584; Ebitda/tonne at Rs 684 adjusted for higher incentives). Adjusted profit after tax declined 33% YoY to Rs 5.3 billion (estimate Rs 3.7 billion). Ambuja Cement’s consolidated grinding capacity will increase to ~97 mtpa (versus 89 mtpa at present) after completion of acquisition of Orient Cement. Further, ongoing brownfield expansions of 4.0 mtpa/6.4 mtpa of clinker/grinding in the east region are expected to be completed by FY25-end. The company’s aims to increase its market share from ~15% currently to ~20% by FY28E. We reduce FY26/27E Ebitda by 4% each on lower cement price assumptions and EPS estimates are getting cut by 11%/8% for FY26/27 (5% for FY25 on higher depreciation). We expect the company to benefit from recent acquisitions (Penna Cement and Orient Cement). Ambuja Cements trades at 18x/14x FY26E/FY27E EV/Ebitda (consolidated). We maintain our Buy rating with a target price of Rs 710, based on 20 times Sep’26E EV/Ebitda..Click on the attachment to read the full report:.Ambuja Cements Q2 Results: Profit Beats Estimates Despite Weak Pricing Environment.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Ambuja Cements Q2 Review - Beats Estimates; Focus Remains On Cost Optimisation; Maintain Buy: Motilal Oswal

The brokerage believes the company’s value-accretive acquisitions and ambitious organic expansion plans will drive growth and profitability in the long run.

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Ambuja Cements Q2 Review - Beats Estimates; Focus Remains On Cost Optimisation; Maintain Buy: Motilal Oswal

The brokerage believes the company’s value-accretive acquisitions and ambitious organic expansion plans will drive growth and profitability in the long run.

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