Ambuja Cements - In The Catbird Seat: ICICI Securities

ICICI Securities Report

Under Adani Group, Ambuja Cement Ltd. has narrowed the margin gap considerably versus peers, mainly led by cost control. And we believe, it has ‘just scratched the surface’ given its ongoing plan of significant green power addition and a resolve to boost efficiency in other areas by leveraging group synergies.

While plans to add ~32 million tonnes per annum capacity is in the works, the upcoming fund infusion of Rs 150 billion (promoter warrant conversion due in April 2024) has potential to expedite (by organic and/or inorganic route) Ambuja Cement reaching the 140 mtpa capacity target well ahead of its initial guidance of FY28 (76 mtpa currently).

Given the odds, Ambuja Cement comes across as a rare opportunity which makes a favorable investment argument irrespective of the sector’s outlook.

Retain Buy; target price revised to Rs 831 (versus Rs 668).

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