Ambuja Cement (ACEM IN) – Q3FY26 Result Update – Long-term growth levers intact; weak deliveries – BUY
Published on 31 Jan 2026
Going ahead, the earnings trajectory hinges on timely execution of planned capacity additions, ramp-up of acquired assets, and delivery on the guided cost reduction roadmap. While near-term profitability improvement may remain gradual given the one-off costs and weak operating leverage, the management’s long-term strategy of scaling capacity to 155mtpa by Mar’28, improving asset utilization, and driving structural cost reduction, provides a clear pathway for margin expansion, contingent on consistent delivery against stated guidance. We raise our FY27E/FY28E EBITDA estimates by ~4%/4.5% on higher volume assumptions, while cutting our Sep’27E target EV/EBITDA multiple to 16x (earlier 17x) to reflect relatively weaker execution. We expect ACEM’s volume/EBITDA to deliver a CAGR of 13%/25% over FY25-28E. Maintain ‘BUY’ with revised TP of Rs640 (Rs667 earlier). At CMP, the stock is trading at trading at EV of 13.9x/11.9x of FY27/28E EBITDA.
