AMBUJACEM

Ambuja Cements (ACEM) delivered strong cons operating performance in Q4FY25 with 13% YoY volume growth (18.7mt aided by MSA and recently acquired assets). The recent uptick in cement pricing aided NSR. Increase in volumes resulted in lower operating costs delivering EBITDA/t of Rs999. Going forward, focus would remain on ramping up of Penna and Sanghi assets which are at 45-50% utilization. Penna clinker units already achieved 75-80% CU and with ACC phasing out older unfeasible clinker units, ACEM would utilize Penna and Sanghi clinker units for feeding grinding units across regions. ACEM maintained its long-term efficiency gain target of Rs500/t through long term supplier agreements, group supply chain synergies, operational efficiencies and improvement in green power. Mgmt. reiterated its confidence of reducing its total cost to Rs3,650/t levels over FY28E and achieved Rs150 savings till the end of FY25. With the completion of Orient deal and 2.4mtpa Farakka GU commissioning, ACEM has crossed the 100mtpa capacity mark and with ongoing expansions it would reach 118mtpa by end-FY26. We expect ACEM revenue/ EBITDA/ PAT to deliver CAGR of 17%/42%/11% over FY25-27E. The stock is trading at EV of 16.6x/13.7x FY26E/FY27E EBITDA. Maintain ‘Buy’ with revised TP of Rs 658 (Rs643 earlier) valuing at 17x EV of Mar’27E EBITDA.