CLSA upgrades Ambuja Cements to 'buy'; shares gain

Shares in Ambuja Cements Ltd gained 1 per cent after CLSA upgraded the stock to "buy" from "outperform", citing 'reasonable' valuations following recent correction.

CLSA said the stock now trades at 15 times its one-year forward earnings, which is broadly in line with the five-year average.

Cement stocks have been under pressure for the last few months following the negative news flow on weak industry demand growth while the increase in royalty by Holcim Ltd further impacted Ambuja and ACC Ltd.

While Ambuja declined 13.3 per cent so far in 2013, ACC has fallen 18.9 per cent in the same period, as of Monday's close.

The research house also said that Ambuja intends to start work on its Rajasthan expansion from the second half of 2013, which would add 4.5 mtpa by 2015.

 Copyright @ Thomson Reuters 2013