Ambuja Cements Q4 Results Review - Focus On Cost Efficiencies; Clarity On Capex Missing: Motilal Oswal

Motilal Oswal Report

Ambuja Cements Ltd.'s result beat our estimates in Q4 FY23 led by higher volumes (up 6% versus estimates). Ebitda was at Rs 6.3 billion versus estimated Rs 5.7 billion and Ebitda/tonne was at Rs 812 versus estimated Rs 788. Adjusted profit after tax was at Rs 4.1 billion versus our estimate of Rs 2.7 billion aided by higher other income and lower effective tax rate.

Cost savings and operational improvement strategies will be the key focus areas of the company led by higher usage of green energy and leveraging on the group’s expertise/exposure into various businesses such as logistics, coal, power etc.

Ambuja Cement reiterated its aim to double capacities in next five years; though no clear roadmap was shared as of now.

We cut our FY25E earnings per share by 20% due to issuance of convertible warrants to the promoter group entity, which we assume to be subscribed and converted into equity shares in FY25E.

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