Ambuja Cements’ share price surged over 3% on Thursday morning to hit an intraday high of ₹687.95.

What Happened: The up-move today comes as Nomura upgraded the stock’s rating to “buy” from “reduce”. The brokerage firm also raised its price target for the cement giant to ₹780 from ₹550. The revised target indicates an around 17% upside from the stock’s last closing price of ₹665.

The global brokerage firm highlighted several positive cues for the upgrade. The company plans to aggressively expand capacity by 24 million tonnes by FY26 through organic and inorganic means, the analyst pointed out. It is also entering new markets, driving above-industry volume growth, and leveraging brownfield projects for cost-effective expansions.

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“After the completion of Penna's acquisition, Ambuja is set to become the third-largest player in Southern India behind only Ultratech and Ramco,” the analysts added in the note. As per the brokerage, the Adani Group company is implementing cost-optimization measures to improve efficiency and profitability.

The analysts also highlighted that they now see the company’s volume and EBITDA over FY24-26 growing at a compound annual growth rate of 13% and 28%, respectively — which is slightly above Nomura’s estimates for Ultratech.

Price Action:  Ambuja Cements' share price was up 2.15% at ₹679.30 shortly after market open on Thursday. The upgrade helped the stock jump back to green after ending in red for three straight sessions.

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