Reduce Ambuja Cements, target price Rs 467 : Centrum Broking

Centrum Broking has reduce call on Ambuja Cements with a target price of Rs 467.The current market price of Ambuja Cement is Rs 479.35.

Ambuja Cements, incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 93027.48 Crore) operating in Cement sector.

Ambuja Cements key Products/Revenue Segments include Cement, Other Operating Revenue and Scrap for the year ending 31-Dec-2021.

Financials
For the quarter ended 30-06-2023, the company has reported a Consolidated Total Income of Rs 8976.14 Crore, up 8.80 % from last quarter Total Income of Rs 8250.45 Crore and up 9.92 % from last year same quarter Total Income of Rs 8165.85 Crore. Company has reported net profit after tax of Rs 1130.20 Crore in latest quarter.

Investment Rationale
On consolidated basis, the numbers are more realistic as ACEM has reported 8.5% YoY growth in revenue and EBITDA/mt of Rs1,082/mt vs Rs791 YoY. The brokerage has valued ACEM standalone business based on 15x FY25 EV/EBITDA and then add value of ACC’s stake based on our TP to arrive at ACEM’s TP of Rs467. Given limited upside from its TP, the brokerage has downgraded its recommendation to Reduce from Buy.

Promoter/FII Holdings
Promoters held 63.2 per cent stake in the company as of 30-Jun-2023, while FIIs owned 12.45 per cent, DIIs 14.08 per cent.