AMBUJACEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | AMBUJACEM | Market Cap | 1,10,376 Cr. | Current Price | 444 ₹ | High / Low | 625 ₹ |
| Stock P/E | 30.8 | Book Value | 206 ₹ | Dividend Yield | 0.45 % | ROCE | 8.80 % |
| ROE | 8.77 % | Face Value | 2.00 ₹ | DMA 50 | 462 ₹ | DMA 200 | 516 ₹ |
| Chg in FII Hold | 0.03 % | Chg in DII Hold | -0.02 % | PAT Qtr | 227 Cr. | PAT Prev Qtr | 1,571 Cr. |
| RSI | 47.0 | MACD | 1.15 | Volume | 35,20,402 | Avg Vol 1Wk | 27,18,068 |
| Low price | 394 ₹ | High price | 625 ₹ | PEG Ratio | 1.49 | Debt to equity | 0.02 |
| 52w Index | 21.7 % | Qtr Profit Var | -87.1 % | EPS | 13.7 ₹ | Industry PE | 30.8 |
📊 Financials: AMBUJACEM shows moderate fundamentals with ROE at 8.77% and ROCE at 8.80%, reflecting average efficiency. Debt-to-equity ratio of 0.02 highlights a strong balance sheet with minimal leverage. EPS of ₹13.7 supports earnings visibility, though quarterly PAT dropped sharply from ₹1,571 Cr. to ₹227 Cr. (-87.1%).
💹 Valuation: Current P/E of 30.8 is aligned with industry average (30.8), suggesting fair valuation. PEG ratio of 1.49 indicates moderate growth prospects relative to valuation. P/B ratio (~2.2) is reasonable compared to book value ₹206, offering some intrinsic value comfort.
🏢 Business Model: AMBUJACEM operates in cement manufacturing, benefiting from infrastructure demand and housing growth. Competitive advantage lies in scale and strong brand presence. However, profitability metrics remain weak, and earnings volatility reduces margin of safety.
📈 Entry Zone: Attractive entry closer to ₹438–448, near DMA 50 (₹462) and support levels. Current price ₹444 is within fair accumulation zone, offering reasonable risk-reward.
📌 Long-Term Holding: Suitable for medium-to-long term investors (2–4 years). Strong balance sheet supports holding, but weak ROE/ROCE and sharp profit decline require cautious monitoring.
Positive
- Debt-to-equity ratio of 0.02 shows near debt-free status
- EPS of ₹13.7 supports earnings visibility
- FII holdings increased slightly (+0.03%)
- Strong brand presence in cement industry
Limitation
- Weak ROE (8.77%) and ROCE (8.80%)
- Quarterly PAT decline (-87.1%) highlights earnings volatility
- Dividend yield of 0.45% is modest
- DII holdings decreased (-0.02%)
Company Negative News
- Sharp quarterly profit decline from ₹1,571 Cr. to ₹227 Cr.
- Domestic institutional selling (-0.02%)
Company Positive News
- FII holdings increased (+0.03%), showing foreign investor confidence
- Strong industry positioning and brand recognition
Industry
- Cement sector supported by infrastructure and housing demand
- Industry P/E at 30.8, aligned with company valuation
Conclusion
AMBUJACEM is a moderately attractive candidate with fair valuation and strong balance sheet, but weak efficiency metrics and sharp profit decline limit upside. Entry is recommended near ₹438–448 for margin of safety. Long-term investors can hold with a 2–4 year horizon, booking partial profits near ₹600–620 resistance unless profitability improves significantly.