Brokerages trim EBITDA estimates, lower target prices post Q4 miss
Margins under pressure due to rising costs, weak realizations
Long-term outlook intact on efficiency gains and expansion strategy
Brokerages turned cautious on Ambuja Cements after its Q4FY26 performance, citing a sharp miss on operating profitability despite headline profit growth. Elara Capital said EBITDA fell well below expectations due to inefficiencies in acquired assets and elevated costs, partly impacted by geopolitical factors. It retained an “accumulate” rating but slashed its target price to ₹494 and cut EBITDA estimates for FY27 and FY28.
Systematix described the quarter as “mixed,” noting that while revenue met expectations, margins and profitability disappointed. The brokerage maintained a “buy” rating but reduced its target price to ₹605, factoring in a higher cost base and near-term headwinds.
1 May 2026
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Similarly, Centrum Broking highlighted a significant EBITDA miss due to cost inflation and weaker realizations. It reiterated a “buy” call, supported by expected synergies and improved utilization, but cut its target price to ₹508 and lowered earnings estimates for the next two years.
Profit Rises on Tax Gains
Ambuja reported a 78.5% year-on-year (YoY) rise in consolidated net profit to ₹1,830.2 crore in Q4FY26, largely driven by tax credits exceeding ₹1,300 crore. These included a deferred tax gain of ₹604 crore and reversal of income-tax provisions worth ₹761 crore.
However, adjusted for these one-offs, normalized profit stood at ₹569 crore, indicating weaker underlying performance. EBITDA declined 21.6% YoY to ₹1,464 crore, while margins contracted by 530 basis points to 13.4%, weighed down by higher fuel, freight and operating costs.
Vinod Bahety, Whole Time Director and CEO, Ambuja Cements said, "We remain focused on stabilising new capacities, strengthening operating efficiency and improving asset utilisation, supported by a debt‑free balance sheet, strong liquidity and the highest credit ratings."
He also added, "While India’s long-term infrastructure growth story remains fundamentally strong, the outlook for FY’27 growth remains soft due to current geopolitical challenges and early forecast of below normal monsoon. We expect industry demand at ~ 5% for FY 27.”
Strong Volumes, Slower Expansion Ahead
Operationally, the company posted record quarterly volumes of 19.9 million tonnes, up 10% YoY, supported by a higher share of premium products and trade sales. Revenue rose 9.4% YoY to ₹10,915.5 crore.
For FY26, revenue grew 19.6% to ₹40,655.7 crore, while net profit increased 9.9% to ₹4,728.2 crore, with volumes rising 16% to 73.7 million tonnes. The board proposed a dividend of ₹2 per share.
Management indicated a shift from aggressive expansion to consolidation, with capacity addition timelines pushed back by one to two years. While long-term demand remains supported by India’s infrastructure growth, the company expects near-term demand to remain modest at around 5%, with cost pressures likely to weigh on margins.
At 11:40 AM on Tuesday, shares of Ambuja Cements were trading down around 2.6% at ₹433.70 on the NSE.
