Ambuja Cement: Bullish Outlook with Target Price of Rs 640, Says Prabhudas Lilladher

Ambuja Cement Research Report

Company Overview Ambuja Cement, a leading cement manufacturer, operates one of its largest integrated cement facilities at Sanghipuram in Kutch, Gujarat. The facility boasts a cement/clinker capacity of 6.1mtpa/6.6mtpa, supported by 1Bt of high-quality limestone reserves.

Capacity Expansion and Capex The company has indicated that its current operational cement capacity of 17,000tpd can increase by 2,500tpd through debottlenecking, taking capacity to 20,000tpd (7mtpa). Ambuja Cement has planned a Rs6bn capex focused on efficiency improvements, including the installation of a Waste Heat Recovery System (WHRS) with a capacity of 18MW.

Logistics and Cost Competitiveness The Sanghipuram plant benefits from coastal logistics through its jetty, enabling clinker and cement movement to markets such as Tuticorin, Dahej, and Mumbai. This results in logistics costs of Rs700/t, compared to the pan-India average of Rs900/t. The plant also has a 130MW captive power capacity, supporting cost competitiveness.

Read also: Oshea Herbals Aims for Rs 650 Crore Revenue Amidst Expansion Efforts

Outlook and Recommendations We remain constructive on Ambuja Cement's long-term growth prospects, given its initiatives on improving cost efficiencies and ongoing expansion strategy. We maintain a BUY rating with a Target Price (TP) of Rs640, valuing the company at 17x EV/Mar'27E EBITDA. At the current market price, the stock is trading at 12.5x/10.7x EV on FY27E/28E EBITDA.