Ambuja Cements Ltd., incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 75524.02 Crore) operating in Cement sector. Ambuja Cements Ltd. key Products/Revenue Segments include Cement, Other Operating Revenue and Scrap for the year ending 31-Dec-2020.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 7055.76 Crore, down -9.68 % from last quarter Total Income of Rs 7811.96 Crore and up 48.39 % from last year same quarter Total Income of Rs 4755.01 Crore. Company reported net profit after tax of Rs 1156.27 Crore in latest quarter.
Investment Rationale
Ambuja Cements’ (ACEM) Q3CY21 standalone EBITDA at Rs7bn (up 3.4% YoY) was broadly in line with our and consensus estimates. Volumes growth (including clinker sale) at 9% YoY was higher than expectation, while EBITDA/te at Rs1,138/te was marginally below estimate. Total cost/te increased 7% YoY and 9% QoQ mainly owing to higher input costs, which were partially mitigated by logistics and other operational efficiencies. Hence, EBITDA/te declined 5% YoY and 24% QoQ to Rs1,138/te (I-Sec: Rs1,201/te). While investor concern around sharp cost increases seems valid, industry has demonstrated strong pricing resilience in the past. Its recent channel checks suggest companies have increased prices by Rs15-20/bag across regions. It believes ACEM with its large pan-India diversified market presence, premium brand positioning and increased focus on cost efficiencies is better placed to sustain/improve margins in medium term. It maintains BUY with unchanged target price of Rs464/sh based on 13x Sep’23E EV/E.
Promoter/FII Holdings
Promoters held 63.26 per cent stake in the company as of 30-Sep-2021, while FIIs owned 16.52 per cent, DIIs 13.35 per cent.
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