Edelweiss Research has maintained 'Reduce' on Ambuja Cement (ACEM) with target price of Rs 146 as against current market price (CMP) of Rs 220 in its report.

Commenting on the investment rationale, the stock broker said, "ACEM Q1CY14 EBITDA of Rs 5.87 billion (up 6% YoY) was lower than our Rs 6.27 billion estimate. While volumes (up 1.7% YoY) were broadly in line, realizations disappointed rising 5% QoQ versus our 7% estimate. Ergo, EBITDA/t at Rs 953 was lower than our Rs 1,007 estimate. However, exceptional gains of Rs 270 million in other income and Rs 948 million in tax, both related to reversal of tax provision of earlier years, aided PAT to touch Rs 5.2 billion versus our Rs 4.5 billion estimate.

While ACEM has benefitted from the price hike in north triggered by shutdown of a 6.5mtpa cement plant, restart of the same poses downward risk to the region's prices. Our existing CY15E EBITDA/t of Rs 1,136 factors in recovery in demand and prices. With industry utilizations slated to remain low at 74% in both FY15/FY16, we see limited scope of upward revision to our EBITDA estimates. Citing expensive valuations of 11.7x CY15E EV/EBITDA, we maintain Reduce." 

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.