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HDFC Securities Institutional Equities
Ambuja Cement - Cost controls drive margin recovery QoQ
During Q4 FY23, Ambuja Cements Ltd. reported only 5% QoQ standalone volume growth (capacity constraints). Unitary Ebitda recovered Rs 145 per metric tonne QoQ to Rs 973 per metric tonne led by continued opex reductions, which more than offset for lower net sales realisation.
Ambuja remains committed to doubling its consolidated capacity over the next five years. It is also working on various cost-reduction exercises to boost margins by an ambitious Rs 300-400 per metric tonne. Opex reduction and major capacity expansions remain key catalysts for valuation re-rating.
ACC - Sub-par margin recovery, slow expansion pace
During Q4 FY23, ACC Ltd.'s Ebitda margin recovered a modest Rs 70 per metric tonne QoQ to Rs 550 per metric tonne. Weak pricing in south reduced the benefits of opex moderation. The long pending Ametha integrated plant is expected in Q2 FY24E. The management is yet to announce major expansions in ACC. However, it is taking up various green energy initiatives which should drive margin expansion.
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