'Buy' Ambuja Cements Maintains Motilal Oswal — Here's Why

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Motilal Oswal Report

Ambuja Cements Ltd. has reiterated its capacity target of 140 mtpa and Ebitda/tonne target of Rs 1,500 by FY28. Until now, capacity growth was largely driven by the inorganic route. However, the expansion will be largely organic in FY26, with multiple projects progressing across various locations.

The company is also expected to prioritize the integration of acquired assets. Profitability improvement will be driven by ongoing cost-saving measures and a rising share of premium products.

We estimate a CAGR of ~17%/35%/33% in consolidated revenue /Ebitda/PAT over FY25-27, albeit on a low base.

We estimate Ebitda/t to increase to Rs 906/Rs 1096 in FY26/FY27 from Rs 768 in FY25. Ambuja Cements (consolidated) trades at 21x/16x FY26/FY27E EV/Ebitda and $147/$140 enterprise value/tonne.

We maintain our Buy rating with a target price of Rs 630 (valuing the stock at 18x FY27E EV/Ebitda).

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