Axis Securities has reiterated a BUY recommendation on Ambuja Cements Ltd with a revised target price of Rs 630, citing transformational consolidation moves and a clear path to scale-led efficiency gains. The proposed amalgamation of ACC and Orient Cement into Ambuja is set to create a unified “One Cement Platform” with industry-leading capacity, logistics optimisation, and cost efficiencies. While the target price has been trimmed from earlier levels, Axis Securities believes the merger-led synergies, capacity expansion roadmap, and favourable infrastructure-led demand cycle position Ambuja for sustainable medium-term growth. Trading at a reasonable forward EV/EBITDA multiple, the stock offers a compelling risk-reward proposition.

Axis Securities Reaffirms BUY Call With Rs 630 Target

Axis Securities has maintained its BUY rating on Ambuja Cements, setting a target price of Rs 630, which implies a potential upside of around 15% from the current market price of Rs 547. The recommendation reflects confidence in Ambuja’s strategic consolidation, operational streamlining, and its strengthening position as a pan-India cement powerhouse under the Adani Group umbrella.

The brokerage values the company at 17x FY27E EV/EBITDA, factoring in the benefits of scale, synergy realisation, and a supportive demand environment driven by infrastructure and housing activity.

‘One Cement Platform’ Marks a Strategic Inflection Point

• Merger of ACC and Orient Cement reshapes the operating structure.
Ambuja Cements has received board approval for two separate schemes of amalgamation to merge ACC Limited and Orient Cement Limited into Ambuja. Once completed, the consolidation will establish a single, unified cement platform with a current capacity of 107 MTPA, which is expected to expand to 155 MTPA by FY28.

• Clearly defined share swap mechanism.
For every 100 equity shares of ACC (face value Rs 10), Ambuja will issue 328 equity shares (face value Rs 2). Similarly, for every 100 equity shares of Orient Cement (face value Rs 1), Ambuja will issue 33 equity shares (face value Rs 2). The appointed date for ACC is 1 January 2026, while Orient Cement’s appointed date is 1 May 2025.

• Completion timeline of 12 months.
Subject to approvals from shareholders, creditors, SEBI, and NCLT, the entire transaction is expected to be completed within a year.

Synergy Benefits Expected to Lift Margins and Efficiency

• Cost savings of at least Rs 100 per tonne.
Axis Securities expects the merger to unlock margin improvement of at least Rs 100 per metric tonne through streamlined branding, reduced sales promotion expenses, and optimised logistics.

• Simplified corporate structure.
The amalgamation eliminates multiple operating entities, allowing stakeholders to engage with a single unified company. This structural simplicity is expected to enhance transparency and improve capital allocation efficiency.

• Centralised deployment of resources.
Financial, managerial, and operational resources will be consolidated under Ambuja, enabling more effective utilisation and faster execution of strategic initiatives.

Post-Merger Operating Landscape and Ownership Changes

• No requirement for separate MSAs.
Post-merger, there will be no requirement for specific MSAs with ACC, Orient, Penna, or Sanghi, as all entities will become integral parts of Ambuja Cements.

• Promoter shareholding to moderate.
Promoter and promoter group holding in Ambuja is expected to decline to 60.94% from 67.65% after approval of all ongoing and proposed merger schemes.

• Brand strategy remains intact.
Both Adani Ambuja and Adani ACC brands will continue to operate, depending on regional strength and product positioning.

Outlook Supported by Capacity Expansion and Demand Tailwinds

Axis Securities believes the consolidation will significantly enhance operating efficiency by improving capacity utilisation, optimising supply chains, and strengthening procurement economics. The unified platform also provides a stronger base for future industry consolidation.

In parallel, the government’s continued focus on infrastructure development, affordable housing, and rising private sector capex is expected to support healthy cement demand. Combined with Ambuja’s expanding footprint and cost optimisation initiatives, these macro tailwinds underpin expectations of sustained volume growth.

Financial Performance and Valuation Snapshot

Ambuja currently trades at 17.5x and 15x FY26E and FY27E EV/EBITDA respectively, which Axis Securities views as reasonable given the scale and synergy benefits expected from the merger.

Stock Levels and Investment Strategy

• Current Market Price (CMP): Rs 547
• Rating: BUY
• Target Price: Rs 630
• Upside Potential: ~15%
• Time Horizon: 12–18 months

Key Technical Levels:

Immediate support: Rs 505

Strong accumulation zone: Rs 480–495

Near-term resistance: Rs 585

Breakout confirmation: Above Rs 600

Medium-term investor target: Rs 630

Axis Securities advises investors to accumulate the stock on dips, particularly during broader market volatility.

Key Risks to the Thesis

• Delay in merger approvals.
Any delay in regulatory or shareholder approvals could postpone synergy realisation.

• Slower-than-expected demand recovery.
Weakness in key regional markets or delays in infrastructure spending may impact volumes.

• Input cost volatility.
Rising power, fuel, or freight costs could pressure margins in the near term.

Bottomline for Investors: Scale, Synergy, and Strategy Align

Ambuja Cements is entering a decisive phase marked by consolidation, scale expansion, and operational simplification. While near-term valuation has been moderated, the strategic rationale behind the ‘One Cement Platform’ remains compelling. With clear synergy levers, a robust balance sheet, and favourable demand drivers, Axis Securities’ BUY call reflects confidence in Ambuja’s ability to deliver consistent, industry-leading performance over the medium term. For long-term investors seeking exposure to India’s infrastructure growth story, Ambuja Cements remains a core candidate.