Arihant Capital has given Accumulate recommendation for Ambuja Cements with a target price of Rs. 383 in its research report issued on Feb 21, 2022
Arihant Capital’s research report on Ambuja Cements
Ambuja Cement Limited reported weak set of numbers for Q4CY21 and were below our estimate especially on operating profit and bottom line front. Revenue from operations grew by 6.3% YoY, and 15.4% QOQ to INR 3735 cr above our estimates of INR 3668 cr. Growth in topline was backed by volume growth, better product mix and improved realization Sales volume remained flat YoY , however grew by 16.7 % QoQ to 7.0 mn tons marginally below our estimates of 7.1 mn tonnes. Growth in QoQ sales volume was backed by increase in demand for urban housing and infrastructure and MSA agreement has also led to volume optimization. Realization/ton grew by 6.3% YoY, however declined by 1% QoQ to INR 5336 per tonne above our expectation of INR 5166 per tonne. Growth in realization on YoY basis was mainly supported by price hike taken across the region and increased share of value added products.
We value the stock at EV/EBIDTA of 14(x) to its CY23E to arrive at a target price of INR 383 and have accumulate rating on the stock .
At 17:30 Ambuja Cements was quoting at Rs 337.40, down Rs 1.60, or 0.47 percent.
It has touched an intraday high of Rs 338.35 and an intraday low of Rs 331.05.
It was trading with volumes of 205,473 shares, compared to its thirty day average of 135,525 shares, an increase of 51.61 percent.
In the previous trading session, the share closed up 0.21 percent or Rs 0.70 at Rs 339.00.
The share touched its 52-week high Rs 442.95 and 52-week low Rs 261.10 on 08 September, 2021 and 24 February, 2021, respectively.
Currently, it is trading 23.74 percent below its 52-week high and 29.38 percent above its 52-week low.
Market capitalisation stands at Rs 66,995.67 crore.