Ambuja Cements (AMBUJACEM)
CyclicalFairStock Score: 51/100 — MIXED
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹417.5 |
| Market Cap | ₹1,03,741.12 Cr |
| P/E Ratio | 23.42 |
| ROCE | 10.5% |
| ROE | 7.04% |
| Dividend Yield | 0.48% |
| Profit Growth | -27.5% |
| Debt/Equity | 0.01 |
| Sales Growth | -7.7% |
| Free Cash Flow | ₹-5,292 Cr |
| Promoter Holding | 67.33% |
| 52-Week Range | ₹341.3 — ₹588.75 |
| Sector | Cement & Cement Products |
| Book Value | ₹240.1 |
AI Analysis
AI-generated, general educational analysis — not personal investment advice.
Ambuja Cements is a business I respect, not one I would buy at today's price. The balance sheet is strong—debt-to-equity of just 0.02, and promoters own 67.33%, so their interests are aligned with mine. Cement is also a necessary product, and Ambuja's established position gives it some stability. But my investment test is not comfort; it is margin of safety. At ₹450.35, I am being asked to pay 32.19 times earnings and 2.08 times book for a company earning only 7.04% on equity and 10.50% on capital. Those are average numbers at best for a capital-intensive, cyclical business. Profits have fallen 23.76%, while sales rose 16.65%—that tells me margins are being squeezed, even if demand has grown. The 5-year revenue CAGR of 7.41% confirms a steady, not spectacular, grower. The negative free cash flow of ₹5,292 Cr is another red flag. In a healthy business, growth should not consume this much cash. The latest quarter, with ₹10,277 Cr sales and just ₹367 Cr net profit, reinforces the margin pressure. The Graham number, a conservative measure of intrinsic value, is only ₹295.01. At the current price, the market is offering me no margin of safety—the negative 69.62% figure says that plainly. A dividend yield of 0.40% is unconvincing, and the negative EV/EBITDA needs an explanation. On a positive note, the Piotroski score of 7 suggests the underlying operations are not badly managed, and the Altman Z-score of 2.34 is acceptable but far from robust. Cement cycles may turn, but I do not gamble on cycles paying an expensive price. I would prefer to wait for either a much lower price or proof that profitability and cash conversion have durably improved.
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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer