Ambuja Cements Q3 Results Review — On Track To Become An Industry Leader: IDBI Capital

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IDBI Capital Report

Ambuja Cements Ltd. Q3 FY25 Ebitda came lower than consensus estimates by 40%, impacted by higher operating expenses. With its ongoing inorganic expansion, Ambuja Cements is on track to become an industry leader. The company is also focused on reducing operational expenses and improving Ebitda through waster heat recovery system enhancements and an increased share of renewable energy, and has achieved 30% of its target so far.

We revise our target price for Ambuja Cements to Rs 586 and maintain a Hold rating, valuing it at 23 times FY27E EV/Ebitda, with its ACC stake discounted by 20% to the current market price.

Capex intensity is expected to remain high, with FY25E capex at Rs 90 billion, 65% of which has been utilized as of 9M FY25.

The company’s capacity expansion plan to 140 million tonnes per annum will be funded through internal accruals and operating cash flows, with targets set at 104 mtpa by FY25, 118 mtpa by FY26, and 140 mtpa by FY28.

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