Thursday 9 July 2015



Ambuja Cements Company Report

COMPANY NAME- AMBUJA CEMENTS LTD.

BSE CODE: 500425                                     SIZE: LARGECAP

SECTOR: CONSTRUCTION & REALTY      INDUSTRY: CEMENTS

STOCK PRICE (AS ON 9th JULY 2015) – RS  244.10 (BSE)

TARGET PRICE: RS. 293                        POTENTIAL UPSIDE: 20%


Net profit of the Ambuja Cement, jumped 44% to Rs 239.06 crore on the back of 9% growth in its income from operation to Rs 2202.06 crore for the quarter ended September 2014, thanks to surge in sales realization. Operating margin increased by 450 basis points to 17.9%, as a result, operating profit growth ballooned 46% to Rs 393.41 crore. The company income from operation increased 9% to Rs 2202.06 crore (including other operating income of Rs 14.51 crore), due to improvement in sales realization, despite fall in sales volume. The combined domestic cement and clinker sales fell 1.1% to 4.67 million tonne but realization surged 10.4% to Rs 4684 per tonne. Operating profit margin (OPM) increased by 450 bps to 17.9% due to drop in freight & handling expenses, other cost, power & fuel cost and employee benefit expenses.


As a % of adjusted sales, there was drop in freight & forwarding cost by 160 bps to 24.4%, other operating cost by 210 bps to 20.4%, power & fuel cost by 70 bps to 22.7%, and employee benefit cost by 30 bps to 6.3%.As a result, the operating profit grew sharply 46% to Rs 393.41 crore. The company expects cement demand likely to be better with expectation of higher GDP growth and improved business sentiments. The drivers for demand will continue to be housing and infrastructure considering Government's recent push in this sector. The Company would continue to work on improving efficiencies and focus on customer and commercial excellence. The Company believes that these initiatives will help improve performance.



Technical Analysis:

This stock is in a firm uptrend and is likely to see much higher levels. The short term support is placed at 264 and long term support exists at 265. On the higher side, previous high of 274 remains the important resistance. A close above this level, Ambuja Cements will witness a sharp rally towards 300.  






Click Here to go through our Weekly Newsletter

Contact us Here:

PRAGMATIC WEALTH MANAGEMENT PVT. LTD.
Head Office:
102, 1st Floor, Topaz Society,
Dr. Nair Road, Agripada, Mumbai Central (E), Mumbai 400011

Tel: +91-8108178683

Follow us on: TwitterLinkedInFacebookPinterestGoogle+



No comments:

Post a Comment