Ambuja Cements reported performance was inline with the brokerage's estimate till operating level while net profit were below estimate on account of lower other income and higher depreciation. Higher operating costs weighing on profitability despite better-than-expected realisations. Revenue remained broadly flat YoY at Rs 9,200 crore as lower volume was offset by higher realisation.
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Motilal Oswal Report
The brokeage remains constructive on Ambuja Cements Ltd., supported by its capacity expansion pipeline, continued focus on profitable growth and structural cost reduction initiatives.
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The brokerage has kept its numbers unchanged and forecasting revenue/EBITDA CAGR of 10%/26%.
However, due to lower volume growth, the brokerage has cut its EV/Ebitda multiple from 12 times to 10x and cut its target price to Rs 457 from Rs 568 on FY28E and maintained its Buy rating on the cement major.
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Ambuja Cements Q2 Results Highlights
Ambuja Cements reported a weak Q2 FY27 performance but in-line with estimate till operating level while net profit were below estimate on account of lower other income and higher depreciation.
Higher operating costs weighing on profitability despite better-than-expected realisations. Revenue remained broadly flat YoY at Rs 9,200 crore as lower volume was offset by higher realisation.
Cement volumes declined 2.4% YoY/-3.5% QoQ to 16.5 mt, marginally below our estimate of 16.6 mt. Blended realisations increased 2.8% YoY and 0.3% QoQ to Rs 5,555/t, exceeding estimate of Rs 5,485/t by 1.3%, providing some support to revenue.
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