INSUBCONTINENT EXCLUSIVE:
Edelweiss Financial Services has a hold call on Ambuja Cements with a target price of Rs 225.
The current market price of Ambuja Cements is
Rs 219.10.
Time period given by the brokerage is one year when Ambuja Cements price can reach the defined target
visibility: The enhanced capex imparts ACEM the much-needed volume growth visibility, details of which are as follows: a) clinker expansion
plan at Marwar Mundwa (Rajasthan) increased to 3.1mtpa from 1.7mtpa; b) setting up additional 1.8mtpa cement grinding capacity; and c) capex
for a CPP as well as WHRS
Its 50.1 per cent subsidiary ACC too has announced plans to add 3mtpa clinker in Ametha (MP) and 5.9mtpa cement (in four different
locations, but largely in Central India)
ACEM and any further commitment to maintain market share could drive a valuation multiple upgrade
However, with volume benefits largely accruing from CY21 and our current valuation on CY19E offering limited upside (valuing ACEM at 12x
