Macquarie has maintained its outperform rating on Ambuja Cements, with a target price of ₹608, implying a modest upside from the current market price of ₹546.75. The brokerage’s view follows Ambuja’s decision to simplify its corporate structure through the proposed merger of cement subsidiaries.
Macquarie said the planned consolidation is a step towards streamlining the group’s cement operations, with cost optimisation emerging as a central objective of the restructuring. The brokerage believes a simplified structure could improve operational efficiency and provide better visibility on execution and capital allocation over the medium term.
However, Macquarie highlighted a few key factors that investors should closely track. These include approval from ACC shareholders, which remains a critical procedural milestone, and brand management, given ACC’s position as one of the strongest and most recognisable cement brands across several regional markets. Any dilution or misalignment in brand strategy could impact market positioning, the brokerage cautioned.
On risks, Macquarie pointed to the possibility of weaker-than-expected cement demand, potential delays in Ambuja’s expansion plans, and benign cement pricing driven by heightened competitive intensity in the sector. These factors could weigh on near-term earnings momentum and limit upside, despite the benefits expected from structural simplification.
Overall, while Macquarie views the merger as directionally positive, it remains watchful on execution, demand trends and competitive dynamics before turning more constructive on the stock.
Disclaimer: This article is for informational purposes only. The views expressed are those of the brokerage and do not constitute investment advice or a recommendation to buy or sell any security.
