AMBUJACEM - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.6

📊 Fundamental Analysis Summary

Ambuja Cements (AMBUJACEM) is a well-established large-cap cement company with strong brand equity and minimal debt. However, its moderate capital efficiency, high PEG ratio, and declining quarterly profits suggest that while it's a stable business, it may not be the best candidate for aggressive long-term compounding. It suits conservative investors looking for sector exposure with low financial risk.

Metric Value Interpretation

P/E Ratio 36.2 Slightly below industry average — moderately priced

PEG Ratio 2.72 Overvalued relative to growth — caution warranted

ROE / ROCE 8.73% / 10.5% Below ideal — modest capital efficiency

Dividend Yield 0.33% Low — not attractive for income investors

Debt-to-Equity 0.01 Extremely low — excellent financial health

EPS ₹16.9 Reasonable — but not high-growth

PAT Growth (QoQ) -3.56% Decline — earnings momentum slowing

Book Value ₹217 Price-to-book ~2.8× — fair for cement sector

RSI / MACD 65.2 / +12.6 RSI nearing overbought; MACD positive — short-term bullish but overheated

DMA 50 / 200 ₹579 / ₹559 Price above both — bullish trend intact

52W Price Range ₹453 – ₹687 Currently mid-to-upper range — not ideal for fresh entry

FII/DII Change -1.17% / +1.40% Mixed sentiment — DII accumulation, FII trimming

📉 Ideal Entry Price Zone

Entry Zone: ₹560 – ₹580

Near 200-DMA and below RSI 60 — better risk-reward.

Avoid entry above ₹620 unless PEG improves and earnings accelerate.

🧭 Exit Strategy & Holding Period

Holding Period

2–3 years, suitable for conservative investors seeking stability.

Exit Strategy

Consider partial exit if PEG remains above 2.5 and ROE stagnates below 10%.

Reassess if price exceeds ₹680 without corresponding EPS or PAT growth.

Key Metrics to Monitor

ROCE improving to 14%+

PEG ratio trending below 2.0

PAT growth > 10% YoY

Dividend payout increasing over time

🧠 Final Thoughts

Ambuja Cements is a low-risk, moderate-return stock. It’s ideal for investors seeking exposure to infrastructure and housing growth without taking on financial risk. However, for aggressive long-term compounding, better ROE/PEG profiles may be found in mid-cap cement or building material peers.

Would you like a comparison with peers like Ultratech Cement or JK Cement to explore stronger long-term performers?

Edit in a page