Ambuja Cement Share Hit All-Time High, Stock Up 10% Intraday: Adani Plans To Double Productions

The share price of Ambuja Cement hit all-time high today, on September 19, at Rs. 572.95 a piece. Its share price today closed at Rs. 564.50, surging by 9.25% intra day. After Adani Group acquired ACC and Ambuja Cement, the company's share price has been surging significantly expecting long term strong growth. On 15 September, Ambuja's new board approved an infusion of Rs. 20,000 crore in the company by way of preferential allotment, and the stock markets reacted positively after that. Gautam Adani is now planning to double its cement production.

"Days after completing a USD 6.5 billion acquisition of Ambuja Cements and ACC, billionaire Gautam Adani said his group has planned to double cement manufacturing capacity and become the most profitable manufacturer in the country. He saw a multifold rise in cement demand in India on the back of record-breaking economic growth and the government's infrastructure creation push, which will give significant margin expansion," a PTI report mentioned today. Gautam Adani recently said, "We anticipate going from the current 70 million tonne capacity to 140 million tonne in next 5 years."

Stock performance: Ambuja

In May, this year this deal was first discussed. In the last 1 month Ambuja's share price surged by 38.36%, and in the last 6 months its share price gained 87.95%. Ambuja Cement is a multibagger company in the long term, however, if the recent trend continues, the share price has the potential to gain more than 100% this year, with Gautam Adani's robust capacity expansion plans.

Adani also mentioned that the reason behind his foray into the cement space is, India is the second largest producer of cement in the world, and its per capita consumption is just 250 kg compared to 1,600 kg of China. Now, the sector has further potential to grow with infrastructure development.

Additionally, commenting on Ambuja Cement, Motilal Oswal stated in a report, "ACC and ACEM, both are net cash positive companies with a cumulative cash balance of ₹8,400 crore (as of end Jun'22). Fundraising of Rs. 2 0,000 can help the group to increase its cement capacities by 70mtpa (25mtpa inorganic expansion and 45mtpa organic expansion) by CY26E without leveraging the balance sheet."