Motilal Oswal has given Neutral recommendation for Ambuja Cements with a target price of Rs. 275 in its research report issued on Feb 19, 2021

Motilal Oswal’s research report on Ambuja Cements

ACEM’s 4QCY20 result highlights gradual normalization of fixed costs curtailed due to the COVID-19 pandemic. Capacity constraints resulted in below industry growth in volumes at 8% YoY. Commissioning of Marwar-Mundwa capacity (in 2QCY21) should help volume grow in line with the industry at 11% CAGR over CY20-22E. We, however, maintain our Neutral rating due to weak growth visibility beyond CY22.


Valuation at 10.3x CY22E EV-to-EBITDA seems fair. We maintain our Neutral rating. We value ACEM at INR275/share, based on 10x CY22E EV-to-EBITDA, but offer a 10% holding company discount for its stake in ACC.