Ambuja Cements Ltd - Q2 CY21 Result Report - YES Securities

(Rating: ADD, TP: Rs422, Upside: 5%)

- Ambuja delivered strong set of numbers for Q2CY21, volumes grew +53.2%YoY and absolute EBITDA outperformed by +61.2%YoY which was broadly in-line with our estimates (-6% volumes & +4% EBITDA). EBITDA margin came in at 28.5% up by 149bps QoQ/ 112bps YoY on the back of lower clinkerisation cost.

- Net sales for the company stood at Rs 33.7bn reflecting a growth of 54.9%YoY which was broadly in-line with our estimates (2% below). Net profit for the company stood at Rs7.2bn which grew by 59%YoY while was above our estimates by 18% on the back of higher other income.

- We have kept our estimates unchanged but upward recalibration of ACC estimates lead to accretion of higher holding value for Ambuja resulting in estimates inching northward. At CMP of Rs402, Ambuja is trading at EV/EBITDA of 15.1x on CY22E. On the backdrop of robust cement demand scenario along with strong net sales realization and cost control measures taken by company, we assign an EV/EBITDA multiple of 16x to its standalone business on CY22E and 20% holdco discount to its stake in ACC. Accordingly, we arrive at a TP of Rs422/share for Ambuja, translating into 5% upside. We have an ADD rating on the stock.

Shares of AMBUJA CEMENTS LTD. was last trading in BSE at Rs. 408.8 as compared to the previous close of Rs. 408. The total number of shares traded during the day was 265244 in over 4507 trades.

The stock hit an intraday high of Rs. 413.9 and intraday low of 401.55. The net turnover during the day was Rs. 108432414.

Source : Equity Bulls

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