New Delhi, Aug 25 Ambuja Cement’s (part of the diversified Adani Portfolio) shares could rise to Rs 745 as the company is well-positioned to benefit from strong demand and capacity expansion, according to a note on Monday.
The brokerage firm Cantor has maintained an “Overweight” rating on the stock -- highlighting Ambuja’s robust balance sheet, improving margins and growth strategy.
“Our 12-month price target of Rs 745, indicating nearly 30 per cent upside from current levels, is based on a blended FY27E EV/EBITDA multiple of 16.5x (equity value of Rs 773) and a DCF approach (Rs 667), with a 70 per cent and 30 per cent split,” the report stated.
“We believe that a premium is justified, given the median EV/EBITDA multiple of domestic peers, due to the company's robust 2x growth rate, as well as its size and scale, making it the second-largest cement company in the market,” it added.
Cantor said Ambuja Cement’s expansion plans and focus on cost efficiencies will help sustain earnings momentum over the next two years.
The company is also expected to gain from steady infrastructure spending and housing demand, which continue to drive cement consumption in India.
The report noted that Ambuja Cement’s operating margins are likely to improve further, supported by softening input costs and better pricing power.
With new capacity additions lined up, volumes are projected to rise strongly, giving the company an edge over peers.
Ambuja Cement recently reported solid quarterly results, reflecting higher profitability and stable cash flows.
Analysts said this financial strength will allow the company to fund expansion without stressing its balance sheet, while also rewarding shareholders.
At the current market price, the target of Rs 745 indicates meaningful upside for investors.
Cantor said Ambuja Cement remains a preferred pick in the cement sector given its growth visibility and strong execution track record.
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