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Hold Ambuja Cements, target Rs 239: Edelweiss Financial Services

Hold Ambuja Cements Ltd. at a price target of Rs 239.|
Jul 27, 2018, 05.07 PM IST
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Ambuja Cements
The current market price of Ambuja Cements is Rs 224.85.
Edelweiss Financial Services has a hold call on Ambuja Cements with a target price of Rs 239.

The current market price of Ambuja Cements is Rs 224.85.

Time period given by the brokerage is one year when Ambuja Cements price can reach the defined target.

"Ambuja Cement’s (ACEM) Q2CY18 EBITDA of Rs 6.2bn (down 4 per cent YoY on a high base) surpassed estimate 21 per cent despite challenges of weak cement prices and rising cost. The beat was driven by a tight leash on fixed cost (down 4 per cent YoY) and better-than-expected realisation (up 2.7 per cent QoQ versus 1 per cent estimate). Variable cost/t rose a modest 1 per cent QoQ (below estimate) even as capacity constraint restricted volume growth to 5.3 per cent YoY (in line). Hence, EBITDA/t at Rs 971 (up 19 per cent QoQ, though down 4 per cent YoY on a high base) stood 21 per cent ahead of estimate. Factoring the H1CY18 performance and current cement prices being higher than Q2CY18 average, we see limited risk to our CY18E EBITDA. Although ACEM is also envisaged to benefit from the expected rise in industry’s clinker utilisation, muted volumes (given no expansion until H2CY20) will keep earnings growth in check. Maintain ‘HOLD’ with TP of Rs 239," Edelweiss Financial Services said in a report.
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Disclaimer: This recommendation is analyst's own and does not represent those of & Please consult your financial advisor before taking any position in the stock/s mentioned.

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