A Look At The Cement Sector After Adani Group's Ambuja Cements Buys Orient Cement

Adani Group-owned Ambuja Cements announced its acquisition of a 46.8% stake in Orient Cement at ₹395.4 per share, valuing the deal at ₹8,100 crore. As part of the deal, Ambuja Cements will acquire a 37.9% stake from Orient Cement’s promoters and an additional 8.9% from public shareholders.  Dharmesh Kant, Head of Equity Research at Chola Securities, sees significant potential in takeover candidates like Orient Cement, noting they often garner maximum traction due to their acquisition appeal. However, Dharmesh Kant cautions that in the current cement industry landscape. According to him, growth in cement space is more of a volume game rather than pricing power. Despite this, he recommends two top players—Ambuja Cements and UltraTech—as strong investments. On the technical side, Kunal V Parar, VP of Technical Research at Choice Equity Broking, observed that Orient Cement has broken out of a flag formation, signalling upside momentum. He forecasts the stock could rise from ₹395 to ₹420 in the near term. Currently, Orient Cement is trading at ₹378, and Parar advises investors to hold, expecting further upward momentum. Orient Cement, part of the CK Birla Group, is a small-cap player in the cement sector. The company has a market capitalization of ₹7,200 crore, annual revenue of ₹3,000 crore, and promoter ownership at approximately 38%. Key institutional stakeholders include Quant Mutual Fund with a 3% stake, Nippon India Life Trustees at 2.5%, and Birla Institute of Technology and Science holding 1.7%.