Morgan Stanely, Jefferies, Macquarie bullish on Ambuja Cements - Check target price here

A day after reporting a profit of over 70 per cent in quarter one results, brokerage firms gave a call option of Buy/Outperform for Ambuja Cements share. The cement leader on Thursday released its Q1 results for the financial year 2020-201. 

Beating the street's expectations, Ambuja Cements reported a profit at Rs 947 crore, up 71 per cent year-on-year basis as compared to Rs 554 crore last year same period. The profit of this cement company jumped on the back of higher sales even as tax expenses rose considerably. 

In this regard, Jefferies maintains Buy call on Ambuja Cements, as the volume growth and realisation are in line with the estimates. The brokerage firm adds, the unit cost of the company led to over 60 per cent YoY growth in EBITDA and it raises consolidated EPS estimate by 11-16 per cent.  

Jefferies sets a target at Rs 360 per share. Ambuja Cements’ shares currently trading at Rs 310 per share down around one and a half per cent. 

Whereas, Macquarie has an Outperform rating on Ambuja Cements, sets a target for the cement company at Rs 367 per share. The brokerage firm says, the growth and cost efficiency has remained key focus areas, moreover, the valuation of the company is sustainable at current levels. 

Maintaining an Overweight call, Morgan Stanley says strong execution on costs of Ambuja Cement came as a big positive surprise. The brokerage firm expects the company to maintain margin despite weak pricing for the calendar year 2021. Morgan Stanley sets a target at Rs 370 per equity share. 

Morgan Stanley believes, the company is a re-rating candidate. It has the potential to improve margin in the calendar year 2022 and close the gap with its peers, adds the brokerage firm. 

The company reported net sales at Rs 7,715 crore, up 23 per cent as special product volumes grew lending support to the topline. Similarly, It’s consolidated EBITDA margin in Q1 stood at 24.1 percent. 

The management commentary said, the company remains cautiously optimistic amid the strong second Covid-19 wave hitting the country going forward.