Financial Daily from THE HINDU group of publications
Sunday, Nov 16, 2003
Financial Daily from THE HINDU group of publications Sunday, Nov 16, 2003 |
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Investment World
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Stocks Markets - Recommendation Gujarat Ambuja: Concrete footing BUY S. Vaidya Nathan
EXPOSURES can be considered in the Gujarat Ambuja Cements' stock at Rs 273. The company appears well set to close out FY'04 with impressive earnings growth as the benefits of improvement in cement prices are likely to be captured over a larger volume. The company has aggressively pushed for volume growth, which is likely to ensure full utilisation of its two-million-tonne capacity in FY04. Its monthly volume growth has consistently been in the double-digit territory over the past two years. Deft management of debt by sourcing low-cost funds from overseas market is likely to further lower interest costs. This may enable it pursue a strategy of volume growth through acquisitions. The demand-supply balance is set to improve over the next two years, leading to better pricing power. Gujarat Ambuja is likely to be the major beneficiary, given its high operating efficiencies.
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