ICICI Securities Maintains Buy Rating for Ambuja Cements, Sets Price Target at Rs 431

ICICI Securities Downgrades Ambuja Cements to HOLD Amidst Disappointing Q4FY26

Ambuja Cements (ACEM) has reported a disappointing quarter for Q4FY26, with earnings before interest, tax, depreciation, and amortization (EBITDA) slipping 22% year-over-year (YoY) due to lower-than-expected organic volume growth. Despite reported volumes rising approximately 10%, the company's high operating cost has further exacerbated the situation. In response to these challenges, ACEM is shifting its focus towards stabilizing its newly commissioned capacities and increasing the utilization of its existing assets.

As a result, the company's FY28 capacity target of 155 million tons per annum (mtpa) is being recalibrated. The demand headwinds, largely driven by the expectation of a below-normal monsoon in the current year, and the elevated competitive intensity amidst rising global fuel costs have also contributed to the downward revision. In light of these factors, ICICI Securities has chopped its earnings estimates for FY27E and FY28E by 26% and 21%, respectively.

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In light of these developments, ICICI Securities has downgraded Ambuja Cements to HOLD from its earlier recommendation of ADD, with a revised target price of INR 431. This valuation is based on an unchanged enterprise value to earnings before interest, tax, depreciation, and amortization (EV/EBITDA) multiple of 15x for FY28E.