Adani Group Stock Upbeat After Q4: Why Brokerages Advise Caution

Amubja Cements‘ share price was upbeat on Friday extending gains to the second straight session after the company posted earnings for the quarter ended March on May 2.

What Happened: The cement giant witnessed a 64% increase in consolidated net profit for the March quarter, soaring to ₹1,055 crore compared to ₹645 crore in the previous year. The company’s revenue from operations saw a 12% rise, reaching ₹8,894 crore during the quarter.

Why Analysts Are Worried: Despite the positive market reactions, analysts at Axis Securities and Kotak Securities advise caution on the stock. Analysts at Axis Securities maintained their “hold” rating but raised that price target to ₹590 from ₹535.

The revised target indicates an around 6% downside from the stock’s current market price of around ₹640. The brokerage said that the company’s Q4 results beat its expectations on revenue but missed targets on EBITDA and net profit.

See Also: Adani Ports Shares Upbeat After Q4 As Several Brokerages Raise Price Target

Kotak Securities has a “sell” call on the stock with a price target of ₹445. The analysts noted that on a standalone basis, the company’s EBITDA fell short of expectations by 4.6%. Additionally, the consolidated EBITDA per ton, standing at ₹1,023/ton, experienced a sequential decline of 17%, primarily driven by lower realisations. The brokerage added that it expects muted prices/deflating energy costs to keep margins range-bound in the near term.

Price Action: Amubja Cements’ share price was up 1.10% to trade at ₹632.60 shortly after market open on Friday.

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Posted In: EarningsEquitiesNewsPrice TargetReiterationMarketsAnalyst RatingsMoversTrading IdeasAdani GroupAmbuja Cements