Motilal Oswal says Rs 1.18 lakh crore Adani company stock's valuation attractive, has potential of...

Adani Group companies recently saw a major decline in their share prices after the news of bribery in the US. However, the shares are now gradually recovering including Ambuja Cements, whose market cap is Rs 1.18 lakh crore. On Monday also, Ambuja Cements stock is trading in the green for the fourth consecutive day. It went up 1.34 per cent and closed at Rs 538.50 on NSE. Recovering from the low of Rs 495, the stock has reached Rs 538.50 in just four days.

Now, Motilal Oswal Wealth Management, a brokerage firm, said that Ambuja Cements is available at an attractive valuation and has the potential to deliver strong growth. The brokerage said that shares of Ambuja Cements have fallen by about 30 per cent in the last 4 to 5 months amid the lack of demand in the sector, persistent pricing pressure in the markets and allegations by the US DOJ.

It added that setting aside the current development of the Adani Group, it believes Ambuja Cements, the second largest player in the Indian cement industry, has the potential to deliver strong earnings growth, led by capacity expansions and cost-saving initiatives.

READ | BIG relief to Mukesh Ambani's Reliance as govt scraps tax on...

Motilal Oswal said that Ambuja Cements stock is trading at attractive valuations after the recent decline. The company said, "We maintain our positive outlook on the company given the company's growing operational scale, balanced capacity mix in various markets and cost saving initiatives." The brokerage has initiated buy coverage for Ambuja Cements with a target price of Rs 710. The brokerage's target of Rs 710 means that the stock can give a return of 38 per cent from the current market price.