Motilal Oswal has issued a buy rating on Ambuja Cements with a target price of ₹500, according to the research report dated July 28, 2026. Prabhudas Lilladher has also recommended a buy rating with a revised target price of ₹504, as reported in their July 29, 2026 research report. Both brokerage firms maintain bullish stances on the cement manufacturer despite recent operational challenges.
According to Motilal Oswal's analysis, Ambuja Cements' Q1FY27 operating performance was in line with estimates as lower-than-estimated operating expenses per tonne were offset by lower-than-estimated volume and realization per tonne. The company's revenue from operations declined 7.5% year-on-year to ₹9,474 crore from ₹10,244 crore in the year-ago quarter, as reported in the regulatory filing. EBITDA fell 19% YoY to ₹15.9 billion, while the company reported EBITDA per tonne of ₹929, down 13% YoY but 9% above estimates. Prabhudas Lilladher notes that cement volumes declined 7% YoY due to recalibration strategy favoring value over volumes, with the company sacrificing low-margin volumes in non-trade segment (-21% YoY).
As reported by Prabhudas Lilladher, cement cost declined by ₹206 per tonne quarter-on-quarter, driven by lower clinker factor and better operational efficiencies, though this was partly offset by imported fuel inflation and packing costs. Cement NSR improved just 1% QoQ despite price hikes across regions and premium product share of 34%, due to consolidation of acquired assets. The company's EBITDA per tonne of ₹918 exceeded Prabhudas Lilladher's estimate of ₹851 per tonne, demonstrating operational resilience despite market challenges.
According to Prabhudas Lilladher, management reiterated its FY27 volume growth guidance of ~8% and expects to recover market share loss over remaining quarters through stronger trade volumes and capacity additions. The brokerage expects consolidated ACEM's volume/EBITDA to deliver a CAGR of 8%/14% over FY26-28E. Motilal Oswal estimates EBITDA per tonne at ₹839-1,035 for FY27-FY28 compared to ₹887 in FY26. At current market price, the stock trades at EV/EBITDA 13.2x of FY28E EBITDA, with Prabhudas Lilladher valuing the stock at 15x EV of March 2028E EBITDA to arrive at their revised target price of ₹504.
