Buy Ambuja Cements., target price Rs 710: Motilal Oswal Financial Services
Ambuja Cements Ltd. with a target price of Rs 710. The current market price of Ambuja Cements is Rs 533.9. Ambuja Cements Ltd., incorporated in 1981, is a Large Cap company with a market cap of Rs 130915.01 crore, operating in the 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 30-09-2024, the company has reported a Consolidated Total Income of Rs 7890.14 crore, down -8.96% from last quarter Total Income of Rs 8666.20 crore and down -.12% from last year same quarter Total Income of Rs 7899.99 crore. The company has reported net profit after tax of Rs 470.67 crore in latest quarter.
Investment Rationale
Ambuja Cement has a net cash balance of Rs 101.4 billion as of Sep-24. Considering cash outflow of INR59b for the acquisition of Orient Cement (including proposed open offer), ACEM is estimated to remain a net cash positive company. Motilal Oswal Financial Services estimates the company to generate sufficient operating cash flows to fund its future organic expansions. 1HFY25 was a challenging period due to a demand slowdown and persistent pricing pressure. However, pent-up demand, a pick-up in construction activities, and infrastructure projects after the festive period should lead to demand recovery going forward. Further, strong demand is estimated to drive price growth for the industry. The brokerage believes Ambuja Cement, with a pan-India presence, should benefit from a recovery in
