Ambuja Cement, ACC, Bajaj Finance, Maruti Suzuki, Tata Motors, Star Health & More Q3 Review: HDFC Securities

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HDFC Securities Institutional Equities

Ambuja Cement - Volume soars but margin collapses

We maintain Add with a lower target price of Rs 600/share (16.5x its consolidated Mar-27E Ebitda). In Q3 FY24, consolidated volume soared 17% YoY on rampup of Sanghi and Penna assets (core volumes rose ~5% YoY). However, unit Ebitda collapsed Rs 280/million tonne QoQ to Rs 500/MT, given aggressive pricing, plant shutdown expenses and elevated costs for Sanghi and Penna. Management remained confident of reducing opex to ~Rs 3,850/mt (which appears aggressive from current elevated levels of ~Rs 4,450/mt) over the next three years.

Among major cost initiatives, Ambuja is aiming for 60/27% green power/green fuel consumption by FY28-end vs ~20/9% in FY25 and reducing lead distance by 100km, which will majorly reduce costs.

Bajaj Finance - Potent franchise navigating through a perfect storm

Bajaj Finance Ltd.’s Q3 FY25 earnings print is in line with our estimates on the back of steady loan growth (+28% YoY) and improving operating efficiency, offset by elevated credit costs (2.2% annualised).

Despite a tough macroeconomic environment, the management emphasised there are signs of improvement in select pockets and expects credit costs to moderate in Q4 FY25. Bajaj Finance’s cross-functional investments since the pandemic are gradually reflecting in higher throughput and efficiency gains (C/I at 33%; opex-to-AUM at 4%), which are likely to sustain over FY26E-FY27E. Bajaj Finance is poised for ~23% AUM CAGR in the medium term, with the addition of new products, while also simultaneously delivering strong profitability.

We trim our FY25/FY26 estimates marginally to factor in higher credit costs, offset by higher fee income; maintain Buy with a revised RI-based target price of Rs 8,535 (implied 4.3x Sep-26 adjusted book value per share; 22x Sep-26 EPS).

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