Ultratech-India Cements deal: Can be mutually beneficial for both companies, says Prabhudas Lilladher

The promoter radical holds a 28.42 percent involvement successful India Cements, portion renowned capitalist Radhakishan Damani and his associates ain 20.78 percent of the company's shares.

UltraTech added that the expected timeframe for completing the acquisition is 1 month. The institution besides noted that the acquisition volition beryllium conducted for cash.

What does analysts say?

According to Tushar Chaudhari, Research Analyst, Prabhudas Lilladher, contention is expected to summation successful the market, however, request to stay muted successful the adjacent term.

“We judge consolidation is expected to proceed successful the cement abstraction with manufacture leaders having beardown equilibrium sheets; contention is besides expected to summation with players trying to summation marketplace share. Near word request remains muted and expected to amended station monsoon. Pricing is besides expected to amended erstwhile request recovers substantially from 2HFY25E. We stay affirmative connected manufacture leaders arsenic we expect some UTCEM and ACEM would support gaining marketplace stock with things are going to get hard for inefficient smaller players," Chaudhari said.

He further added that the woody tin beryllium mutually beneficial for UltraTech and Indian Cements arsenic it tin enactment of strategical cement proviso statement to summation marketplace stock successful undersupplied AP/Telangana loop and ICEM’s fiscal show tin besides amended arsenic measurement improves.

India Cements has a full cement accumulation capableness of 14.5 cardinal tonnes per annum (mtpa): 5 mtpa successful Telangana, 6 mtpa successful Tamil Nadu, 2.1 mtpa successful Andhra Pradesh, and 1.5 mtpa successful Rajasthan. Additionally, it has a clinker capableness of 11.13 mtpa. This capableness aligns good with UltraTech Cement's operations successful the Southern region, should UltraTech Cement successfully negociate a woody with India Cements' promoters successful the future. UltraTech Cement presently has a capableness of 2 mtpa successful Telangana, 5 mtpa successful Tamil Nadu, and 10.6 mtpa successful Andhra Pradesh.

The PL expert expressed assurance successful manufacture leaders, predicting that UltraTech Cement and Ambuja Cements volition proceed to summation marketplace stock arsenic conditions go progressively challenging for little businesslike smaller players.

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Published: 27 Jun 2024, 10:56 PM IST