Ambuja's Penna Acquisition Another Step In Adani Cement's Aim Of 140 MTPA Capacity
The company will be hiking its cement grinding capacity and expanding its market presence following its latest acquisition of Penna Cement.
Ambuja Cements Ltd.'s proposed acquisition of Penna Cement Industries Ltd. will lead to an additional capacity of 14 million tonnes per annum and marks another step in Adani Cement's aim of a 140 MTPA capacity by 2028.
The move will help the company increase its presence in the south and fast-track the capacity, which otherwise was planned as a greenfield expansion, according to a release.
The proposed acquisition adds 14 MTPA capacity and takes Adani Cement's operational capacity to 89 MTPA. The company is ready with a blueprint to hike its production capacity by 47 MTPA.
It also provides a potential to expand by an additional 3 MTPA from the surplus clinker in Jodhpur. The expected commissioning for the Jodhpur industrial unit is 12 months, it said.
The acquisition also helps improve profitability by improving capacity utilisation up to 85% by 2027 and Ebitda by Rs 1,500 per tonne by financial year 2028. This will improve the overall return on capital employed of Ambuja Cements, according to the release.
The move will help the company increase its presence in the south India market by 8 percentage points to 15% and pan-India market share by 2%.
With an improved working capital to facilitate competitive procurement and logistic optimisation, Ambuja Cements will achieve 10% of its total logistic movement targeted by 2028.
Ambuja Cements stock rose as much as 3.69% during the day to Rs 689 apiece on the NSE, reaching its all-time high. It was trading 1.91% higher at Rs 677.50 apiece, compared to a 0.14% advance in the benchmark NSE Nifty 50 as of 12:39 p.m.
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