Ambuja Cements On Track For Industry-Beating Growth After Sanghi Takeover, Says Jefferies

Ambuja Cements Ltd. now has a "strong visibility of industry-leading volume growth" as it takes control of Sanghi Industries Ltd., according to Jefferies Financial Group Inc.

Ambuja's capacity now stands at 74.6 million tonnes per annum with immediate de-bottlenecking opportunity of 1.5 MTPA, Jefferies said. The deal will help the Adani-Group owned cement maker to increase its footprint in the western coast with an expected capacity increase of 15 MTPA.

Jefferies maintains a 'buy' on Ambuja with a target price of Rs 540 as it aims to increase capacity by 100–110 million tonnes per annum by 2026–27.

Jefferies On Ambuja Cements

• Maintains 'buy' with a price target of Rs 540.

• Completes Sanghi Industries acquisition at EV of Rs 5,185 crore, implying estimated EV/t of $70–75.

• Post acquisition, capacity at 74.6 MTPA, with de-bottlenecking opportunity of 1.5 MTPA.

• Slated to increase capacity by 100–110 MTPA by FY26/27.

Ambuja Cements management also said it can avail an opportunity through Sanghi Industries, and increase its clinker capacity by 0.5 MTPA.

Sanghi Industries is likely to provide Ambuja Cements an opportunity for green power generation. It may increase up to 45%, incorporating additional solar power 12 MW of waste heat recovery system, and 30 MW solar and wind power, Jefferies said.

The cement maker aims to expand its footprint in Gujarat, Maharashtra, Karnataka, and Kerala in over 30 months through this acquisition.

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