Fundamental Result Update

Ambuja Cements



Ambuja cements ltd. reported 60% rise in its net profit for the quarter ended Dec, 2016, which came in at Rs 176 crore vs. Rs 110 crore in corresponding quarter of the previous year owing majorly to the lower tax outgo for the quarter. Total income of the company dropped by 6.2% to Rs 2,231 crore for quarter under review as compared to Rs 2,379 crore for the corresponding quarter of previous year.

Valuation: Government continues to focus on housing and infrastructure development with increased allocations for road infra as well as awarding infrastructure status to affordable housing which should drive cement demand going ahead. We have valued stock on EV/EBITDA of 16(x) its CY17 estimates and have arrived at a fair value of Rs 232 per share. At CMP of Rs 240 the stock is available at CY17E P/E(x) and EV/EBITDA(x) of 43.9(x) and 23.9(x) respectively. Our fair market value for ACC cement stands at Rs 26,265cr. We have ‘Neutral’ rating on the stock.


Tags: FundamentalResult Update


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