Global brokerage firms bullish on Ambuja Cements' stock after Penna acquisition

by IANS |

Mumbai, June 14 (IANS) Leading global brokerage firms have gone bullish on the Adani Group’s Ambuja Cements after it announced to acquire Hyderabad-based Penna Cement for Rs 10,442 crore.


Jefferies has a 'buy' rating on the Ambuja Cements shares, giving it a target price of Rs 735 per share.


The stock of Ambuja Cements went up more than 2 per cent at Rs 679 in the morning trade on Friday.


According to Jefferies, the landmark acquisition of Penna Cement would boost the positioning of the Adani Group’s cement and building material major as a pan-India leader.


Morgan Stanley said the acquisition would support volume growth for Ambuja Cements over the medium term.


Macquarie expects that with the acquisition, the capacity share of Ambuja Cements in South India is likely to improve to 10-11 per cent from the current 4-5 per cent.


According to Macquarie analysts, a key factor to see is whether this acquisition will help Ambuja Cements reach its capacity target of 140 million tonnes by FY28.


Global brokerage Nuvama also retained a 'buy' rating on the company’s stock with a target price of Rs 767 on FY26E EV/EBITDA of 18 times.


The acquisition, to be funded by internal accruals, will improve Adani Cement’s market share pan-India by 2 per cent and by 8 per cent in south India.


PCIL has 14 MTPA cement capacity, of which 10 MTPA is operational, and the remaining is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and will be completed within 6 to 12 months.


Ambuja Cements reported profit after tax (PAT) at Rs 4,738 crore for FY24 -- up by a record-setting 119 per cent (year-on-year) -- and operating EBITDA at Rs 6,400 crore, up by 73 per cent.

Latest News
Justin Trudeau's praise for Diljit as 'guy from Punjab' earns rebuke from BJP Mon, Jul 15, 2024, 05:07 PM
Six killed, two seriously injured in crash in eastern Myanmar Mon, Jul 15, 2024, 05:05 PM
Hayley Matthews rejoins Melbourne Renegades ahead of WBBL season 10 Mon, Jul 15, 2024, 04:42 PM
Apple's India sales hit new high in FY24 amid increased manufacturing, premiumisation trend Mon, Jul 15, 2024, 04:36 PM
Stock markets continue upward trajectory, Nifty touches fresh all-time high Mon, Jul 15, 2024, 04:32 PM
South Korea discusses ways to bolster bilateral ties with New Zealand Mon, Jul 15, 2024, 04:30 PM
Oli thanks PM Modi, vows to take India-Nepal ties to new heights Mon, Jul 15, 2024, 04:29 PM
Calcutta HC adjourns hearing in defamation suit filed by Guv against CM Mon, Jul 15, 2024, 04:28 PM
Filmmaker Nallamuthu advocates for an Indian wildlife channel Mon, Jul 15, 2024, 04:28 PM
SC refuses to quash DA case against Karnataka Deputy CM Shivakumar Mon, Jul 15, 2024, 03:50 PM
Study shows late detection of cancer is a major concern Mon, Jul 15, 2024, 03:47 PM
24X7 coordinated patrolling by Indo-Bangla border forces to curb crimes, infiltration Mon, Jul 15, 2024, 03:46 PM
Sridhar Vembu on developing talent, addressing 'power imbalance' at Indian workplaces Mon, Jul 15, 2024, 03:45 PM
Delhi court extends Manish Sisodia's judicial custody till July 22 Mon, Jul 15, 2024, 03:41 PM
Yemen's Houthis claim attacks on Israeli ship, city Mon, Jul 15, 2024, 03:22 PM