KRChoksey Recommends Hold Rating on Ambuja Cements

KRChoksey Recommends Hold Rating on Ambuja CementsAccording to reports, KRChoksey recommended hold rating on Ambuja Cements aiming at Rs 140, on the 28th of July 2011, as Ambuja Cement Ltd net revenues was at Rs 2173.3 crore, an increase of 6.1% year on year from Rs 2047 crore in the second quarter of 2010 as well as a rise of 1.5% on a quarterly basis.

Also, the dispatch for the quarter was 5.29 mn tonnes from 5.41 mn tonnes the previous year, which was a fall by 2.2% year on year and a drop of 6.8% on quarterly basis.

However, the major growth was majorly prompted by the ‘concentrated’ efforts of cement players, whereas the net realizations for Ambuja Cement surged to Rs 205.4 per bag, a raise of 5.7% and 8.5% respectively on a quarterly and yearly basis.

The major aspect for the quarter was the rise in realization to the amount of 8.5% on a yearly basis and 5.7% on a quarterly basis, though the rise in prices of cement could not translate into the rise at the end, as the cost of fuel particularly coal went up significantly.

Moreover, Ambuja Cement is now priced at a premium to its other major peers such as; ACC and Ultratech Cement, mainly owing to its better operation performance, strong balance sheet, better margins and less maintenance costs.