Ambuja Cements expects industry demand growth for CY22 to be in line with GDP growth for the country, but demand for the current quarter is not in line with expectations,

Ambuja Cements expects industry demand growth for CY22 to be in line with GDP growth for the country, but demand for the current quarter is not in line with expectations, Jefferies India said. Currently, demand is good in urban centers but weak in rural markets. Jefferies also added that the medium-term (3-5 year) demand outlook looks promising with the government’s focus on housing and infrastructure development. On Wednesday, Ambuja Cement’s share price was 3 percent higher at Rs 304.90 apiece on BSE.

Jefferies maintained its buy recommendation for the stock with a price target of Rs 360 each, a potential increase of 27 percent from last close. In addition to the shares of other cement companies, Jefferies also has a “buy” rating on ACC. It recommended holding UltraTech Cement, Shree Cement and The Ramco Cements shares. Jefferies noted a few key risks related to his buy call, including delays in ramping up recently commissioned capacity; significant industry capacity expansion in key markets; weaker-than-expected demand growth in key markets; and a higher-than-expected increase in costs.

The brokerage firm expects Ambuja Cements to list 12%/13% Ebitda/PAT Cagr for CY21-24. “But there are challenges to CY22’s revenues due to the current steep cost inflation
trend,” it added. According to the research firm, Ambuja Cements has a net cash balance, a positive point in times of uncertainty about the economy. The recent capacity expansion in Marwa Mundhwa, Rajasthan, is likely to result in strong volume growth for the next 3-4 quarters. It also noted leadership restructuring in India and acute cost focus to increase margins.

Ambuja cement stock movement

Ambuja Cements shares have risen 2.3 percent in the past five days. While it is down 16 percent in one month and nearly 30 percent in the past six months. So far in calendar year 2022, Ambuja Cements’ share price has fallen by 21.6 percent. In terms of traded volume, 66,000 shares have been traded on bse so far, while 34.85 lakh have been traded on NSE.

The stock recommendations in this story are from the respective research analysts and brokerage firms. Financial Express Online bears no responsibility for their investment advice. Capital market investments are subject to rules and regulations. Consult your investment advisor before investing.


This post Cement Stocks to Buy: Jefferies Says to Buy Ambuja Cements, ACC; share will rise to 27% was original published at “https://www.financialexpress.com/market/ambuja-cements-medium-term-demand-outlook-strong-jefferies-says-buy-stock-may-rally-22/2462725/”

LEAVE A REPLY

Please enter your comment!
Please enter your name here