AMBUJACEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | AMBUJACEM | Market Cap | 1,08,338 Cr. | Current Price | 436 ₹ | High / Low | 625 ₹ |
| Stock P/E | 27.9 | Book Value | 213 ₹ | Dividend Yield | 0.46 % | ROCE | 3.25 % |
| ROE | 7.67 % | Face Value | 2.00 ₹ | DMA 50 | 451 ₹ | DMA 200 | 505 ₹ |
| Chg in FII Hold | 0.03 % | Chg in DII Hold | -0.02 % | PAT Qtr | 1,742 Cr. | PAT Prev Qtr | -59.2 Cr. |
| RSI | 47.1 | MACD | -3.94 | Volume | 27,98,889 | Avg Vol 1Wk | 23,87,724 |
| Low price | 394 ₹ | High price | 625 ₹ | PEG Ratio | 2.10 | Debt to equity | 0.02 |
| 52w Index | 18.3 % | Qtr Profit Var | 214 % | EPS | 14.4 ₹ | Industry PE | 28.3 |
📊 Financial Overview:
AMBUJACEM shows moderate fundamentals with quarterly PAT at ₹1,742 Cr., a sharp recovery from the previous loss of -₹59.2 Cr. ROCE at 3.25% and ROE at 7.67% are weak, indicating limited efficiency in capital utilization. Debt-to-equity is very low at 0.02, ensuring financial stability. EPS stands at ₹14.4, supported by recent profit recovery. Cash flows appear stable but profitability ratios remain modest.
💹 Valuation Indicators:
The stock trades at a P/E of 27.9, close to the industry average of 28.3, suggesting fair valuation. P/B ratio is ~2.0 (436 ÷ 213), which is reasonable. PEG ratio of 2.10 indicates moderate overvaluation relative to growth prospects. Dividend yield of 0.46% provides minor investor returns. Intrinsic value appears aligned with current price, making it fairly valued.
🏢 Business Model & Advantage:
AMBUJACEM operates in cement and building materials, benefiting from India’s infrastructure and housing demand. Its competitive advantage lies in scale, brand strength, and low leverage. Institutional sentiment is stable, with FIIs slightly increasing holdings (+0.03%) while DIIs reduced (-0.02%).
📈 Entry Zone:
Technically, support lies near ₹394 (recent low) and ₹451 (50 DMA). A favorable entry zone would be between ₹420–₹440 if the stock consolidates. Long-term investors may hold given stable fundamentals, though efficiency ratios need improvement.
Positive
- 📌 Strong recovery in quarterly PAT (₹1,742 Cr. vs -₹59.2 Cr.).
- 📌 Very low debt-to-equity (0.02) ensures financial stability.
- 📌 EPS of ₹14.4 reflects profitability rebound.
- 📌 FII holdings increased slightly (+0.03%).
Limitation
- ⚠️ Weak ROCE (3.25%) and ROE (7.67%).
- ⚠️ PEG ratio (2.10) suggests moderate overvaluation.
- ⚠️ DII holdings decreased (-0.02%).
Company Negative News
- 📰 Previous quarter losses highlight volatility in earnings.
Company Positive News
- 📰 Strong profit recovery in the latest quarter boosted sentiment.
Industry
- 🌐 Cement industry benefits from infrastructure and housing demand in India.
- 🌐 Industry P/E at 28.3 reflects growth potential, with AMBUJACEM trading at fair valuation.
Conclusion
✅ AMBUJACEM has shown a strong profit recovery and maintains a debt-light balance sheet. However, weak return ratios limit efficiency. Entry is advisable near ₹420–₹440, with long-term holding supported by industry demand and stable valuation. Monitoring profitability trends is essential for sustained confidence.
For deeper insights, you could explore a peer comparison or a cement sector outlook to complement this analysis.