Motilal Oswal has given Neutral recommendation for Ambuja Cements with a target price of Rs. 530 in its research report issued on Sep 19, 2022

Motilal Oswal’s research report on Ambuja Cements

ACEM has announced the issuance of warrants to Harmonia Trade and Investment (promoter entity) on a preferential basis, at INR418.87/warrant, aggregating to INR200b.  These warrants can be exercised and converted into equity shares in one or more tranches within 18 months. This signals the promoters’ intent towards growth and commitment for further investments in the Cement business. Upon conversion of these warrants, the promoters’ shareholding will increase to 70.3% v/s 63.2% at present.

Outlook

We have discounted our CY26-based assumptions at a WACC of 12% to arrive our CY24-based TP. Our TP for ACC/ACEM has increased to INR2,515/INR530 from INR2,260/INR350. Assuming a cost benefit/t of INR200/INR300 for ACC/ ACEM, our TP will increase to INR3,185/INR680.

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