Ambuja Cement - Buckling Up For Ambitious Growth: ICICI Securities

ICICI Securities Report

April 2024 is turning out to be an eventful month for Ambuja Cement Ltd. with three key developments –

1. Promoter fund infusion of Rs 83.4 billion towards warrant conversion, being the last tranche of Rs 200 billion preferential warrants. Bulking up of cash reserves (to more than Rs 230 billion) may usher in the 140 million tonnes per annum capacity target well ahead of its FY28 guidance.

2. Acquisition of 1.5 mtpa grinding at Tuticorin, Tamil Nadu, suggests efforts to increase the coastal movement of clinker from subsidiary Sanghi Industries Ltd. besides increasing the footprint in South India, and

3. Sanghi Industries’ plan to consider a proposal for fund raise on April 2022, 2024.

Announcement of any growth capex at Sanghi Industries may be seen in positive light. With Ambuja Cement evidently buckling up to take-off in its ambitious growth journey, we retain Buy with target price of Rs 831.

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