Ambuja Cements Set for 30% Surge with Cantor Fitzgerald's Overweight Rating

Cantor Fitzgerald has given Ambuja Cements an 'overweight' rating, predicting a 30% investment return over the next year. The company aims for substantial growth, with capacity expanding from 104.5 MTPA to 140 MTPA by 2027-28 and plans to double the industry growth rate.

In a significant endorsement, global financial services giant Cantor Fitzgerald has rated Ambuja Cements as 'overweight', forecasting an impressive 30% return on investments within the next 12 months. The firm has set a target price of Rs 745 for Ambuja Cements, signifying a potential upside of nearly 30% from current levels.

Trading presently at Rs 582 per share, Ambuja Cements is the ninth-largest cement company globally. Cantor Fitzgerald, referencing company insights, highlighted Ambuja's rapid expansion, achieving a 50% growth in less than three years to reach a capacity of 104.5 MTPA. This capacity is projected to increase to 118 MTPA by 2025-26 and further to 140 MTPA by 2027-28 through a mix of acquisitions and organic growth.

The company's market share has surged from 8% to 15.5% over the past three years, with ambitious targets to hit 18% and 20% by 2027-28 and 2029-30, respectively. Cantor Fitzgerald's report, dated August 24, also states that Ambuja Cements aims to grow at double the rate of India's cement sector, which is expected to expand at 1.2 to 1.5 times the GDP.

Ambuja Cements plans to cut raw material costs by 8-10%, maintain competitiveness via digital transformation, and focus on premium cement as a critical revenue stream. The Indian cement sector, the world's second-largest, is dominated by rapid economic growth and urbanization, with a current installed capacity of 686 MTPA compared to China's 3,000-3,500 MTPA, according to the report.

The report also notes that India's top cement companies are on track to increase capacity by roughly 12% by 2029-30, adding about 130 million metric tonnes collectively.

(With inputs from agencies.)