A wider selloff in Adani group companies caused Ambuja Cement and ACC shares to drop significantly. After Hindenburg Research disclosed that it has short positions in shares of the Adani Group, which Gautam Adani only recently bought, the price of the cement companies dropped by up to 10%. Hindenburg Research expressed alarm over the Adani group’s high debt levels and accused it of using corporations set up in offshore tax havens extensively and improperly.
However, the Adani group rejects the US short-allegations sellers as unfounded and said they had been time to harm its brand before a significant share sale.
On Wednesday, Ambuja Cements stock fell 10% to Rs 450.75 before partially regaining its previous value. The stock’s closing price on Tuesday was Rs 498.55. Less than Rs 92,000 crore was the market capitalization of the firm.
Despite the most recent downturn, Ambuja Cement shares have returned 31% over the past year, but the company was down 25% from its 52-week high of Rs 598.15 on December 9, 2022.
What do officials say?
ACC sales volume would increase 10.9% quarter over quarter to 7.6 metric tonnes (MT), mostly due to a rebound in post-monsoon building activity. With moderate pet coke & fuel prices and other costs, the cost of production per tonne will decrease by Rs 309 percent per tonne quarterly. EBITDA/tonne is anticipating to rise by 35% QoQ to Rs 807/tonne, according to ICICIDirect Research.
We anticipate an increase in sales volume of 8.3% QoQ to 7.3 MT. Realizations will also increase by 2% QoQ, resulting in a sequential revenue gain of 10.5% QoQ. Due to the low base impact, EBITDA per tonne is anticipating significant increases in QoQ. The same is probably going to be 14% lower year over year,” it stated.
As the government will begin allocating infrastructure projects with the Lok Sabha elections approaching, the overall demand is anticipated to be strong, according to Nirmal Bang Institutional Equities.
“The Adani group will benefit and grow the company to new heights with the help of the well-known brand values of ACC and Ambuja Cements, as well as the seasoned management at the head of these businesses. Given the Adani group’s diversification, synergies are anticipating to take the shape of cost savings that will increase profitability, “they said.
Ambuja Cement continues to be one of Nirmal Bang’s top selections as it resumes its coverage of 12 cement businesses.
ALSO READ: Edtech Startup Creative Galileo launches its Second Learning App- Toondemy
