Buy Ambuja Cements; target of Rs 283: HDFC Securities

HDFC Securities' research report on Ambuja Cements

During 3QCY20, Ambuja Cements (ACEM) reported strong results. Standalone net sales/EBITDA/APAT rose 9/55/88% YoY to Rs 28.53/6.80/4.41bn respectively. Volumes jumped 8% YoY on strong retail demand. Opex fell 8% YoY on robust (and structural) cost controls and low fuel prices, driving a 44% jump in unitary EBITDA to Rs 1,200/MT. In a positive surprise, ACEM announced Rs 17/share dividends, thus paying off 60% of its large cash pile up on books.

Outlook

We maintain BUY with a higher target price (SOTP-based) of Rs 283/share, owing to increased volume growth and robust unitary EBITDA visibility, and a leaner balance sheet, post the large dividend payout.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More