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Motilal Oswal Report
Ambuja Cements Ltd.'s operating performance in the January-March 2023 quarter was in line with our estimates, with Ebitda at Rs 7.9 billion (our estimate: Rs 7.8 billion) and Ebitda/tonne at Rs 977 (estimate: Rs 951).
Higher other income and a lower tax rate led to a ~21% beat in adjusted profit after tax at Rs 5.6 billion.
Ambuja Cements' management aims to double the grinding capacity to 140 million tonnes per annum in the next five years and has outlined the first phase of expansion of ~11 mtpa (orders will be placed in the near term).
It targets cost reductions of Rs 300- 400/tonne and aims to achieve Ebitda/tonne of Rs 1,200-1,400/tonne in FY24.
We largely maintain our earnings estimates, with Ebitda/tonne assumptions of Rs 1,078/Rs 1,162 in FY24E/25E. Cost-saving strategies and equipment ordering will be key monitorables for a constructive view on the company.
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