Prabhudas Lilladher has given Buy recommendation for Ambuja Cement with a target price of Rs. 390 in its research report issued on Feb 21, 2022

Prabhudas Lilladher’s research report on Ambuja Cement

Ambuja Cement (ACEM) reported weak Q4CY21 earnings. EBITDA fell 26% YoY to Rs5.7bn, below our/consensus estimates by 16%/20%. Miss was on account of higher than expected energy cost and other expenses. ACEM’s power & fuel cost increased 58% YoY/Rs576 per ton compared to 27%/39% (Rs255/Rs375) increase in ACC/Ultratech. High cost inventory and restrictions on usage of cheaper high Sulphur pet coke in Gujarat operations resulted in steeper increase in ACEM’s energy cost. We trim our EBITDA estimates for CY22e/CY23e by 11.5%/8.2%, largely due to lower margins.

Outlook

Given the better visibility on volume growth and improved margins trajectory, we maintain BUY rating with revised TP of Rs390 (earlier Rs440), EV/EBITDA of 13.5x CY23e.

More Info on Trent

At 14:26 hrs Ambuja Cements was quoting at Rs 335.40, down Rs 3.60, or 1.06 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 175,453 shares, compared to its thirty day average of 132,590 shares, an increase of 32.33 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 24.28 percent below its 52-week high and 28.46 percent above its 52-week low.

Market capitalisation stands at Rs 66,598.54 crore.

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