India Cements Share Price Highlights 27 June 2024: India Cements stock surges 11% as UltraTech to buy 23% stake

VLA Ambala further commented on India Cements Ltd., saying, “INDIACEM opened the latest session with an over 8% gap up and is trading within 14% from its previous day’s closing level. The stock is currently trading at Rs 287 against its lifetime high of Rs. 332, displaying an RSI reading of 78 on the daily, 70 on the weekly, and 62 on the daily timeframe. The prevailing momentum suggests a potential pullback upside continuation, paving the way for a new rally in the stock. The stock’s current momentum and the sector’s growth prospects make it a quality stock for mid-term gains. Hence, those interested may consider buying or averaging the stock at Rs.245 to 250 levels for a target price of Rs. 290 to 450. They may consider remaining invested in INDIACEM for a period of 20-50 weeks while sticking close to the stop loss of Rs. 210.”

VLA Ambala, SEBI registered research analyst, said, “ULTRACEMCO opened with an over 1% gap up and rose 6.50% in intraday. The stock is currently trading at an all-time high with an RSI reading of 69 on daily, 66 on weekly, and 78 on monthly timeframes, suggesting an overbought condition. While the trend is bullish, I recommend exploring dips for this stock. Those interested may consider entering the stock at the buying or averaging range of Rs. 10800-11090 for a targeted price of Rs. 12000-14530. For ULTRACEMCO, I recommend a holding period of 3-25 weeks but I insist they adhere to a strict stop loss of Rs. 9400. Considering the scope and potential in this cement business category, this stock could offer significant growth opportunities to those willing to bet on it.”

IDBI Capital Equity’s report said, “In Apr-24 cement industry off-take (as per Core sector data) is up 0.6% YoY. But for FY25E, we expect volume off-take to pick up in 2HFY25. Key is to watch commentary on Union budget post central government elections.”

​Goldman Sachs’ latest report provides valuable insights​ for investors in the Indian cement sector. Its strategic assessments and price targets highlight opportunities and risks across major companies

Vinod Jhaveri, Independent Analyst, Pure Technicals, “Rapid growth in the construction sector is contributing to the growth in the Cement sector plus M&A in the cement sector will play a big role. Ultratech is getting aggressive and has approved making a financial investment to purchase up to 7.06 crore equity shares of India Cement at 267 Technically India Cement is attempting to take out the monthly swing high of 299. If closes above 299 we can see it heading much higher to around 325-350 zone.”

Tushar Chaudhari, Research Analyst, Prabhudas Lilladher, said, “India Cements has 14.5mtpa cement capacity (5mtpa in Telangana, 6mtpa in Tamil Nadu, 2.1mtpa in AP, and 1.5mtpa in Rajasthan) along with 11.13mtpa clinker capacity; which complements well with UTCEM’s Southern capacities if UTCEM is able to crack a deal with ICEM promoters in future. UTCEM has 2mtpa in Telangana, 5mtpa in Tamil Nadu, 10.6mtpa in AP.

This deal can be mutually beneficial for UTCEM and ICEM as UTCEM can work of strategic cement supply agreement to gain market share in undersupplied AP/Telangana belt and ICEM’s financial performance can also improve as volume improves.

We believe consolidation is expected to continue in the cement space with industry leaders having strong balance sheets; competition is also expected to increase with players trying to gain market share. Near term demand remains muted and expected to improve post monsoon. Pricing is also expected to improve once demand recovers substantially from 2HFY25E. We remain positive on industry leaders as we expect both UTCEM and ACEM would keep gaining market share with things are going to get difficult for inefficient smaller players.

Shares of India Cements were trading up 9 per cent at ₹287 at 10.15 am.

The current market price, India Cements is trading at a financial year 2025 Enterprise Value to EBITDA multiple of 17 times, while for financial year 2026, it is trading at 13.69 times.

UltraTech Cements shares were up 4 per cent at ₹11,598.

UltraTech Cement, India’s top cement producer by capacity, said on Thursday it will buy a 23 per cent stake in India Cements for up to ₹1,885 crore (about $226 million).

UltraTech said it would buy 70.6 million India Cements shares for up to ₹267 each, a 1.7 per cent premium to the stock’s closing price on Wednesday.

India Cements’s shares jumped 10 per cent to nearly ₹289 in initial trade, while UltraTech’s shares rose 5.2 per cent.