Ambuja Cements has been the focus of multiple brokerage assessments following its Q2FY25 results. Each brokerage has provided unique insights, highlighting Ambuja’s performance in volume growth, margins, and its strategic position in the market.
Nomura: Buy | Target Price: ₹1,600 | Upside: 45%
Nomura maintains a Buy rating on Ambuja Cements with an increased target price of ₹1,600, implying a substantial upside of 45% from current levels. Nomura is optimistic about Ambuja’s second-half performance for FY25, driven by expected growth in pre-sales, operating cash flow (OCF) generation, and revenue recognition. Nomura also commended the company’s premiumization strategy at Palava, its shift from pilot to growth phase in Bangalore, and an expanding annuity portfolio.
Goldman Sachs: Neutral | Target Price: ₹640 | Upside: 12%
Goldman Sachs has a Neutral rating for Ambuja Cements with a target price of ₹640, indicating a 12% upside. Goldman Sachs noted an 8% year-over-year increase in consolidated volumes, with organic growth (excluding Penna and My Home acquisitions) close to 5%. The EBITDA per tonne came in at ₹783, outperforming key competitors such as UltraTech and Dalmia, and the quarterly realizations grew by 1%, showcasing resilient profitability.
Citi: Neutral | Target Price: ₹610 | Upside: 7%
Citi also rates Ambuja Cements as Neutral with a target price of ₹610, implying a 7% potential upside. Ambuja’s consolidated EBITDA of ₹11.1 billion exceeded Citi’s expectations but was down 15% year-over-year due to a 7% drop in realizations, despite higher volumes and reduced costs. Citi also highlighted Ambuja’s expectation for industry demand growth at 4-5% for FY25, anticipating an 8-10% growth in the second half, while lowering its FY25-27 EBITDA estimates by up to 23% based on recent pricing and volume trends.
UBS: Sell | Target Price: ₹475 | Downside: 17%
UBS remains the most cautious, rating Ambuja Cements as a Sell with a target price of ₹475, projecting a downside of 17%. While Ambuja’s Q2FY25 consolidated EBITDA fell slightly below consensus, UBS acknowledged the relatively resilient performance considering the subdued demand and weak pricing environment. UBS praised the company’s 9% volume growth, including a 7% increase in grey cement, with EBITDA per tonne declining only ₹27 sequentially, outperforming peers who saw steeper drops.
Brokerages are split on Ambuja Cements, with Nomura being the most optimistic on its long-term growth prospects due to strong revenue and operational expansion, while UBS advises caution amid ongoing challenges in the pricing environment. Both Citi and Goldman Sachs remain neutral, balancing Ambuja’s volume growth and margin resilience against potential price pressures.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should perform their due diligence before making investment decisions.
