#ChoiceBroking Pick of the Week: #AmbujaCement

1. Ambuja Cements Limited.
 Ambuja Cements Ltd (ACL), a part of a global conglomerate Holcim, is one of India’s leading cement
manufacturers and has completed over 25 years of operations. The company, initially called Gujarat Ambuja
Cements Ltd, was founded by Narotam Sekhsaria in 1983 in partnership with Suresh Neotia.
 Ambuja Cements was set up in 1986. In the last decade the company has grown tenfold. The total cement
capacity of the company is 18.5 million tones. Its plants are some of the most efficient in the world. With
environment protection measures that are on par with the finest in the developed world. The company's most
distinctive attribute, however, is its approach to the business.
 Today, Ambuja is the 3rd largest cement company in India, with an annual plant capacity of 16 million tonnes
including Ambuja Cement Eastern Ltd. and revenue in excess of Rs.3298 crore.
 In 2013 the company approved a proposal, wherein Ambuja will first acquire from Holderind Investments Ltd.,
Mauritius (Holcim), a 24% stake in Holcim India for a cash consideration of Rs 3,500 crores, followed by a merger
of Holcim India into Ambuja. These intra-group transactions will result in Ambuja holding 50.01% stake in ACC.In
addition, the Board also provided its approval for Ambuja to make commercially reasonable efforts to invest upto
Rs 3,000 crores to acquire an economic ownership in ACC of up to 10% without triggering a mandatory open
offer, subject to shareholders and regulatory approvals as applicable.
 Technical Outlook
 Ambuja cement has outperformed drastically in the recent rally which we have seen in the market, this shows
that the stock’s relative strength is higher. Pictorially, we can see stock has breached its long & intermediate
downward sloping trendline which signifies texture of the stock turned positive.
 Stock has taken support at long term 250 DMA (Blue line) and intermediate term 100 DMA (Magenta line), it
attracts attention of swing traders and positional traders.
 In last two trading session we have observed decent activity in stock with increase in volume which validates
strength in the stock.
 On monthly chart stock has taken support at rising trend line which was incepted in Year 2008 and formed strong
tall candle, it indicates resumption in upward movement.
 Momentum oscillator RSI has reversed from oversold territory which is multiple support line and has also
breached it’s downward sloping trendline.
 Based on above technical parameters, We believe the stock is ready for uptrend after concluding corrective phase
in which Ambuja Cement has potential to touch levels of Rs. 270 in few trading session.
Company AMBUJCEM
Recommendation Buy
Sector : CEMENT
Buying Range : 230 & Upto 225
Price Potential : 270
Stop Loss (Closing Basis): 212
Mkt Cap (Rs. Cr.): 35601
TTM EPS (Rs.) 5.11
TTM Sales (Rs. Cr.) 9362
BVPS (Rs.) 68.37
Reserves (Rs. Cr.) 10300
P/BV 3.36
PE 44.86
Bloomberg Code : ACEM:IN
Reuters Code : ABUJ.NS
TW = Twelve Months
TTM= Trailing 12 months
SEBI Registered – Research Analyst Equities I Commodities I Currencies I Mutual Funds
Pick of the Week: Ambuja Cement Ltd.
28th May, 2016
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2. Pick of the Week: Ambuja Cement Ltd.
28th May, 2016
SEBI Certified – Research Analyst Equities I Commodities I Currencies I Mutual FundsSEBI Registered – Research Analyst Equities I Commodities I Currencies I Mutual Funds
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Kapil Shah
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Date: 2016.05.28 16:34:59 +05'30'