ICICI Securities has given Buy recommendation for Ambuja Cements recommended buy rating on the stock with a target price of Rs 464 in its research with a target price of Rs. 464 in its research report issued on Dec 14, 2021

ICICI Securities research report on Ambuja Cements

We expect Ambuja Cements (ACEM) to further improve its EBITDA/te (say by >Rs150/te over CY21-24E) led by a better market mix (rising share of North) and increased cost efficiencies, and narrow its EBITDA/te gap vs peers. The recent ~5mnte Marwa-Mundwa expansion would not only enable ACEM to sustain its market share, but also likely improve overall EBITDA/te by >Rs50/te, given higher profitability in North / West, better cost efficiencies of the new plant and additional government incentives. Increasing share of WHRS from 6MW to ~90MW by CY23E, and higher efficiencies via MSA with ACC could drive another >Rs100/te EBITDA/te expansion, in our view. Accordingly, ACEM’s valuation gap vs larger peers may shrink further and its outperformance (seen over past two years) is likely to continue in the medium term.


Maintain BUY with an unchanged target price of Rs464/sh (13x standalone CY23E EV/E). Key risk: Lower demand/prices.

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