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Ambuja Cements- Strong volume growth continues with focus on cost optimisation

ICICIdirect Research 02 May 2025 DISCLAIMER

Volume growth remained healthy at ~13% YoY (+13% QoQ) in Q4FY25, led by demand pick-up and additional volume of 1.6 mtpa from Sanghi Industries & Penna Cement

Realisation remained down 1.3% YoY but improved 2.6% QoQ, mainly led by increase in share of premium products and improvement in prices during the quarter

Thus, revenue was at Rs 9888.6 crore, up by 11.2% YoY (+16.3% QoQ)

EBITDA/ton improved by 86.1% QoQ to Rs 999/ton, led by lower costs and improvement in realization. Subsequently, EBITDA was up 110.9% QoQ to Rs 1867.6 crore

Looking forward, we expect company's operational performance will continue to improve during FY26E-27E. Volume growth is expected to remain healthy, supported by an increase in demand and a continuous expansion in capacity. Company targets 118 mtpa of capacity by FY26E (from 100 mtpa at present). By FY28E, company aims to reach 140 mtpa

Improvement in realizations and continuous focus on operational efficiencies in terms of logistics and power & fuel (management guided Rs 500+ reduction in total cost/ton at the group level in the next 3 years)

We maintain Buy on Ambuja Cements with a revised target price of Rs 650

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