The shares of a small-cap cement company rose 17% following the news report that Adani Group is in discussions to acquire a German-based cement firm for an estimated value of around Rs 10,000 crores.
Share price variations:
With a market capitalization of Rs. 5,592.36 crores, HeidelbergCement India Limited opened today’s trading session at Rs. 241, marking a 10.16% increase from its previous close of Rs 218.77. The stock continued to rally, reaching an intraday high of Rs. 258, reflecting a substantial gain of 17.93% from the prior close.
Reason for the Rise:
The recent movement in Heidelberg Cement India Limited’s stock was driven by news that the Adani Group is reportedly in talks with the Heidelberg Cement Group, Germany—the parent company—for a potential buyout of its subsidiaries Heidelberg Cement India Limited and Zuari Cement. The acquisition deal is speculated to be valued at around USD 1.2 billion as per Economic Times.
The potential acquisition of Heidelberg Cement India Limited and Zuari Cement is in line with Adani Group’s strategy to secure a 20% market share in the Indian cement sector by 2028. The Adani Group has recently made significant acquisitions, including Ambuja Cements, ACC Cement, Sanghi Industries, My Home Group’s grinding unit, and Penna Cements. With these acquisitions, Adani Group has expanded its production capacity to 89 million tonnes and aims to increase it to 140 million tonnes by 2028.
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Financial Performance:
For Q1FY25 the company reported a net profit decrease of 23.73% to Rs. 39.9 crores compared to a net profit of Rs. 52.32 crores in Q1FY24, while revenue from operations also marked a decrease of 10.65% to Rs. 532.19 crores from Rs. 595.64 crores in comparison to the same period. The company has also successfully reduced its debt over the years.
About the company:
HeidelbergCement India Limited, formerly known as Mysore Cements Limited (MCL) is a Subsidiary of HeidelbergCement Group, Germany. Presently, the
Company is operating 3 cement plants located at Damoh (Madhya Pradesh), Jhansi (Uttar Pradesh), and Ammasandra (Karnataka) with an installed cement manufacturing capacity of 6.26 MTPA.
The company successfully increased its market share in Central India and penetrated new areas bringing new channel partners to its fold and selling under the brands MyCem and MyCem Power.
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Written By: Joseph Pv
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