Operational challenges persist: 1Q EBITDA outperformed on cost discipline; strategic execution remains key; cut TP to INR500

研报英文原文证据摘录

Operational challenges persist: 1Q EBITDA outperformed on cost discipline; strategic execution remains key; cut TP to INR500

Global Markets Research

Ambuja Cements ABUJ.NS ACEM IN 29 July 2026

EQUITY: CONSTRUCTION MATERIALS

RatingOperational challenges persist Remains Buy

Target price1Q EBITDA outperformed on cost discipline; strategic Reduced from INR INR 500execution remains key; cut TP to INR500 540

Valuation: Maintain Buy but trim TP to INR500 as we lower our EBITDA estimates Closing28 July 2026price INR 426

We cut our FY27F/28F/29F volume estimates for by 9%/5%/7% (Fig.4), as we expect

management’s strategy of reducing non-trade volumes in favor of high-priced trade volumes to Implied upside +17.4%

potentially weigh on the company’s overall market share. In addition, uncertainties surrounding the

ramp-up of acquired assets and pace of capacity utilization improvement continue to pose Market Cap (USD mn) 11,042.8

execution risk. Although management has reiterated its commitment to achieving cost savings of ADT (USD mn) 15.9

INR200-250/t, we believe these targets remain aggressive and model in less than INR50-100/t cost

reduction over FY27-28F. Hence, we lower our FY27F/28F/29F EBITDA estimates by 6%/10%/5% Relative performance chart

to INR75bn/INR93bn/INR115bn (Fig.4). Our FY27F/28F EBITDA estimates are broadly in line with

the Bloomberg consensus estimates, while our FY29F estimate is above consensus by 5% (Fig.5

). While we retain our constructive stance on Ambuja, concerns around loss of market

share and cost optimization have led us to reduce our target price by 7% to INR500. We

continue to value the company at a one-year-forward EV/EBITDA multiple of 15.0x

(unchanged). The stock is currently trading at 11.6x one-year-forward EV/EBITDA.