Ambuja Cements Limited one of the flagship companies of the Adani Group and the 2nd Largest Cement aggregator in India is currently in focus following its recent strategic initiatives, acquisitions, capital infusions, and many more to get ahead in the race to become the market leader in the cement industry.
With a market capitalization of Rs. 1,70,632 Crores, the shares of Ambuja Cements Limited were trading at Rs. 692.75 per equity share, up 0.04 percent from its previous day’s close price of Rs. 692.45. It has delivered a return of 24 percent in one month.
What happened?
In March 2024, The Adani Family had further infused Rs. 6,661 Crores in Ambuja Cements Limited followed by the earlier infusion of Rs. 5,000 Crores in October 2022, infused by the promoters into the Company for exercising the issuance of the warrant. Following this capital infusion, the Adani family has increased their holding stake in the company by 3.6 percent, attaining a total of 66.7 percent holding.
Production growth
The fund’s infusion will be instrumental in accomplishing the capacity of 140 million tonnes per annum by 2028 by the cement vertical. This infusion will give capital flexibility for accelerated growth, capital management initiatives, and best-in-class balance sheet strength.
Merger
In continuation of the above, the board of directors of Ambuja Cements approved the proposal for the scheme of amalgamation of Adani Cementation Limited with Ambuja Cements, following which Adani Cement Industries will become a Wholly Owned Subsidiary of Ambuja Cements Limited
Acquisition
Further, it has acquired 100 percent of Penna Cement Industries, making it a wholly-owned subsidiary of the company, thereby increasing its operational capacity to 89 MTPA, giving advantage over its competitors and increasing its presence.
Disinvestment
Lastly Ambuja Cements Limited along with Ravi Sanghi sold a 3.52 percent stake or 90.92 Equity shares in its subsidiary company Sanghi Industries Limited at a floor price of Rs. 90 for a total consideration of Rs. 81.82 Crores, to achieve minimum shareholding requirements as specified by SEBI and for working capital requirements.
Ambuja Cements Limited is focusing on organic growth through brownfield projects while remaining open to strategic acquisitions for further expansion and is expecting its operating capacity to reach 96MTPA by the end of 2025, 110 MTPA by FY26 and aims to achieve 140 MTPA Capacity by 2028.It also intends to become a debt-free company which will provide substantial savings in Interest Costs and increase profitability.
About the company
Ambuja Cements Limited is part of the Indian Conglomerate the Adani Group and is among the leading cement companies in India, it is primarily engaged in the business of manufacturing and sale of cement and cement-related products under the brand names, Ambuja Cement, Ambuja Kawach, Ambuja Cool walls, and many more.
As of FY24, Ambuja Cements Limited has a cement capacity of 77MTPA, has a Proposed acquisition to add 14 MTPA capacity, has a provided potential to expand an additional 3 MTPA with surplus clinker in Jodhpur IU, and aims to achieve 140 MTPA Capacity by 2028.
Financials and Ratios
Its Revenue from operations grew by 11.65 percent from Rs. 7,965.98 Crores in Q4FY23 to Rs. 8,893.99 Crores in Q4FY24, accompanied by profits of Rs. 763.3 Crores to Rs. 1,525.78 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 10.3 percent and a return on capital employed (ROCE) of 14 percent. It has reported a debt-to-equity ratio of 0.02.
Written by: Bharath K.S
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