Cantor Fitzgerald Bullish on Ambuja Cements: Projected 30% Gains Ahead

Cantor Fitzgerald rates Ambuja Cements as 'overweight,' predicting a 30% investment return within a year. The company's strategic growth and market share expansion underpin the optimism, with plans for increased capacity and cost reduction likely to solidify its competitive stance in India's cement sector.

A global financial advisory powerhouse, Cantor Fitzgerald, has bestowed an "overweight" rating on Ambuja Cements, forecasting a lucrative 30% return on investment over the next 12 months. The firm's analysis sets a target price of Rs 745, suggesting a near 30% uptick from its existing share valuation at Rs 582.

Currently standing as the ninth-largest cement producer worldwide, Ambuja Cements has demonstrated remarkable growth, expanding its capacity by 50% in under three years, now reaching 104.5 MTPA. This capacity is projected to rise to 118 MTPA by 2025-26 and further to 140 MTPA by 2027-28, driven by a blend of strategic acquisitions and organic expansion.

The company's market share has seen a substantial climb, doubling from about 8% to 15.5% in three years, with ambitions to hit 18% by 2027-28 and 20% by 2029-30. Coupled with a digital transformation initiative and a focus on premium cement, Ambuja is poised for an 8-10% cut in raw material costs, enhancing its profitability margins amid robust industry growth projections.

(With inputs from agencies.)