Ambuja Cement (ACEM IN) – Visit Update – Improving connectivity to unlock efficiencies – BUY
Published on 10 Mar 2026
We believe Sanghipuram represents a strategically important asset within Ambuja’s western India network given its large limestone reserves, coastal logistics advantage and scope for efficiency improvement. While management has set an ambitious target of reducing variable costs by Rs500/t to ~Rs1,500/t at Sanghi resulting an EBITDA/t improvement to ~Rs1,800-2,000/t (from c. ~Rs1,200-1,500/t), we believe timely execution will be the key. Improving Railway connectivity to Kutch, jetty capacity expansion and ongoing transmission augmentation would help ACEM over medium term. We remain constructive on Ambuja’s long-term growth prospects given its initiatives on improving cost efficiencies and ongoing expansion strategy. Maintain BUY with TP of Rs640 valuing the company at 17x EV/Mar’27E EBITDA. At CMP, the stock is trading at 12.5x/10.7x EV on FY27E/28E EBITDA.
