Adani Group Ambuja Cements Shares Fall 31%, Should You Buy, Hold or Sell?

Ambuja Cements

Financial analysts have offered mixed opinions about the performance of Ambuja Cements Limited, a part of the Adani group, as its stock has tumbled 31% in 2023. Despite the company reporting a 46% YoY rise in net profit for the December quarter, brokerages have varying price targets for the counter ranging from $ 2.09 to $ 1.37.

JM Financial has a target of $ 2.09 on the stock and believes that group synergies are playing out, with a focus on cost optimisation. As Ambuja Cements has a well-established pan-India network and high capacity utilisation, JM Financial maintains a ‘BUY’ rating and a September 2023 target of $ 2.09, with a 21 times EV/Ebitda rating to the standalone business.

Motilal Oswal has a target of $ 1.37 on the stock, reducing its FY25E EPS by 20% due to the issuance of convertible warrants to the promoter group entity. It values the stock at 15 times September 2024E EV/Ebitda. YES Securities has an ‘ADD’ rating for the stock with a target of $ 1.59, while Emkay Global has cut its target on the stock to $ 1.56 from $ 1.76 earlier and B&K Securities has cut its target to $ 1.87 from $ 2.16.

Investor’s should assess the varying price targets carefully before deciding whether to buy, hold or sell Ambuja Cements stock.

Ambuja Cements Limited Stock Analysis:

The average target price for Ambuja Cements Limited, as per the forecasts from 7 analysts, is INR 516.14 for the next 12 months. Stock Target Advisor has assigned a Slightly Bullish analyst ratings to the stock of Ambuja Cements Limited, which is based on 9 positive signals and 6 negative signals. At the time of closing, the stock price of Ambuja Cements Limited was INR 384.65. Over the last week, the stock price has risen by 50.55%, while it has plummeted by 135.15% in the past month and only increased by 0.48% in the last year.

Company Overview:

Incorporated in 1981, Ambuja Cements Limited is headquartered in Mumbai, India and operates as a subsidiary of Holderind Investments Ltd. The company manufactures and markets cement and cement-related products to individual homebuilders, masons, contractors, architects, and engineers in India. Their product range includes Portland pozzolana cement, ordinary Portland cement, temperature-resistant concrete blocks, Blaine Portland cement, and micro materials. They distribute these products via dealers, authorized retail stockists, retailers, and authorized sales representatives. The company formerly went by the name of Gujarat Ambuja Cements Limited, and changed its name to Ambuja Cements Limited in April 2007.

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