Ambuja Cements slips 3% on Q4 miss; brokerages cut estimates, target price

Ambuja Cements reported a consolidated net profit of ₹1,830 crore in the Q4FY26, up 78.5 per cent from ₹1,025 crore in the year-ago period

Ambuja Cements share price today

Shares of cement manufacturer Ambuja Cements fell nearly 3 per cent to hit an intraday low of ₹432.20 on the National Stock Exchange (NSE) after the company's lower-than-expected performance in the March 2026 quarter (Q4FY26) results. 

The Adani Group company reported a consolidated net profit of ₹1,830 crore in the Q4FY26, up 78.5 per cent from ₹1,025 crore in the year-ago period. The company's revenue from operations grew 10 per cent to ₹10,892 crore as against ₹9,894 crore in the corresponding quarter of the previous fiscal.  

At the time of writing, Ambuja Cements' stock was trading at ₹434, down 2.5 per cent from its previous session close of ₹445.30. In comparison, the benchmark NSE Nifty50 was quoting at 23,933.80 levels, down by 185.50 points or 0.77 per cent. On a year-to-date basis, the stock has plunged around 20 per cent, compared to a 7.7 per cent decline in Nifty50.  

 

According to Motilal Oswal Financial Services (MOFSL), Ambuja Cement’s Q4FY26 performance came in below both internal and consensus estimates, largely due to an elevated cost structure. The brokerage noted that the company has delivered lower profitability compared with peers among those that have reported results so far. 

It highlighted that although management had indicated during its Q3 earnings call that operating expenses per tonne had normalised by end-December 2025 and would ease in Q4FY26, costs remained high. This was driven by higher branding and packaging expenses, incremental shutdown-related costs, longer lead distances, and additional goods tax in select states. 

The company's earnings before interest, tax, depreciation and amortisation (Ebitda) declined 19 per cent to ₹1,441 crore from ₹1,781 crore in the Q4FY25. Ebitda margin also slipped to 13.2 per cent from 18 per cent. Ambuja Cements reported its highest-ever annual volume of 73.7 million tonnes, along with an annual Ebitda of ₹887 per metric tonne.   READ | Aditya Birla Capital stock jumps 5% on healthy Q4; brokerages retain 'Buy' 

According to PL Capital, Ambuja Cement reported a weak consolidated operating performance in Q4, impacted by lower ramp-up and higher maintenance costs at acquired assets, softer volume growth of 7 per cent year-on-year (Y-o-Y), and elevated expenses on branding, fuel, and freight. 

The brokerage noted that net sales realisation improved marginally despite price hikes across regions and a higher share of premium cement at around 36 per cent. However, raw material and other costs rose due to higher fly ash and PP bag inflation, while freight expenses were also affected by plant shutdowns, pushing overall costs to around ₹4,500 per tonne. As a result, EBITDA per tonne declined to ₹728, below estimates. 

PL Capital highlighted that management views Q4 costs as a peak, with expectations of moderation going forward, and has guided for volume growth of around 8 per cent in FY27.

Brokerages on Ambuja Cements outlook

According to PL Capital, after two years of muted execution and profitability, Ambuja Cement management is recalibrating its strategy by prioritising better utilisation of existing assets over new capacity additions, with new projects implying an IRR of around 18 per cent. The company is also focusing on optimisation at existing integrated units to reduce lead distances, along with sustained cost rationalisation efforts. 

The brokerage noted that the near-term focus is on improving utilisation and driving operating efficiencies, with management targeting cost savings of around ₹250 per tonne in both FY27 and FY28, before pursuing further capacity expansion. PL Capital believes this strategic shift is positive in direction, though execution of cost savings and stabilisation of acquired assets remain key monitorables for sustainable profitability improvement.  READ | BJP's West Bengal win: L&T, Bandhan Bank among others may gain, say experts 

It has cut FY27E and FY28E Ebitda estimates by around 11 per cent and 10 per cent, respectively, factoring in lower volume assumptions. The brokerage expects the company to deliver volume and Ebitda CAGR of 8 per cent and 23 per cent over FY26–FY28E. At current levels, the stock is trading at an EV/Ebitda of 14.8x and 12.4x FY27E and FY28E estimates. PL Capital has maintained a ‘Buy’ rating with a revised target price of ₹524 (earlier ₹598), valuing the stock at 15x March 2028E Ebitda. 

MOFSL expects near-term performance to remain under pressure due to continued cost escalation and a muted pricing environment. However, it believes that over the long term, internal cost efficiency initiatives and the transition to a single cement platform will support improvement in overall performance. 

The brokerage estimates a consolidated revenue, Ebitda and PAT CAGR of around 11 per cent, 18 per cent and 19 per cent, respectively, over FY26–FY28, supported by volume growth of about 9 per cent. It expects Ebitda per tonne at ₹856/₹1,053 in FY27/FY28 versus ₹887 in FY26. 

Ambuja is currently trading at 18x/13x FY27E/FY28E EV/Ebitda and $99/93 EV per tonne. MOFSL has maintained its 'Buy' rating on the stock. It values the stock at 16x FY28E EV/Ebitda, arriving at a target price of ₹530, down from ₹560 earlier.  ========================

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