Sell Ambuja Cements: Indiabulls Securities

Indiabulls Securities Research has downgraded its rating on Ambuja Cements from hold to sell in its February 27, 2009 research report. “Ambuja Cements reported a healthy top-line growth of 10.7% yoy in CY08 primarily due to a higher-than-expected realisation rate, although the EBITDA margin and net profit were marginally lower than our estimates. The upsurge in the stock’s price over the last couple of months was driven by positive investor sentiment for the industry, created by strong despatch numbers in the last two months and the government’s support to the industry in the form of excise duty cuts.”

“However, we believe that this upsurge is unsustainable as demand cools off further due to the economic slowdown (reflected by the recent GDP data released) and coincides with capacity expansions in the industry, thereby leading to an excess supply scenario. Meanwhile, further potential upsides remain limited. Consequently, we have downgraded our rating on the stock from Hold to Sell,” says Indiabulls Securities’ research report.

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To read the full report click on the attachment……

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