Ambuja Cements Ltd shares dropped over 2% in early trade on Tuesday to ₹434, extending pressure after its fiscal fourth quarter results. According to reports from Moneycontrol, the decline comes after the company reported a miss on operational metrics, with weak operating performance and margin compression weighing on investor sentiment despite a sharp rise in reported profit. The stock has been under pressure over the past year, declining 19.8 percent compared with a 1.7 percent drop in the Nifty 50 index.
In its filing to the exchanges, Ambuja Cements reported the highest-ever sales volume in a quarter at 19.9 million tonnes, representing a 10% year-on-year growth. The company achieved revenue at its highest-ever levels during the quarter, though operating EBITDA stood at ₹1,464 crore with a margin of 13.4%. As reported by Moneycontrol, the company faced significant operational headwinds with EBITDA falling and margins contracting sharply due to higher fuel, freight and other input costs. EBITDA per tonne also remained weak, indicating pressure on profitability at the unit level.
Jefferies has retained its Buy rating on Ambuja Cements share price with a reduced target price of ₹595, representing a 33% upside from current levels. The brokerage noted that the company is recalibrating its strategy, including a reset of its expansion plans, with capacity addition timelines pushed back by around two years. Jefferies has lowered its EBITDA estimates and target price, noting that a clear improvement in costs will be key to restoring investor confidence. HSBC maintained a 'Buy' rating but cut its target price to ₹560 per share, highlighting the company's cost reduction roadmap as a key positive with targeted savings of around ₹500 per tonne.
Management indicated that although costs have risen by about ₹25 per bag, the industry has seen only a modest increase of around ₹10 per bag in April. Any further price hikes are expected to come through gradually, as reported by Moneycontrol. Whole Time Director and CEO Vinod Bahety noted that FY26 was a year of resilience for the cement sector, which witnessed consolidation, GST 2.0 reforms, while adverse weather conditions and global geopolitical factors affected operations. The company expects industry demand at 5% for FY 27, with the outlook remaining soft due to current geopolitical challenges and early forecast of below normal monsoon.
