India Cements shares: LIC sells stake in Radhakishan Damani-backed cement maker in Q1

Life Insurance Corporation of India Ltd (LIC) has cut stake in Radhakishan Damani-backed India Cements Ltd. Data showed LIC owned 3.833 per cent stake in India Cements as on July 4. This was 58.7 basis points lower than 4.42 per cent stake it held in the cement maker as on March 31.

Shares of India Cements fell 0.19 per cent to Rs 211.45 on BSE. LIC's 3.833 per cent stake in the cement maker amounted to Rs 251 crore. Radhakishan Damani, along with his brother Gopikishan Damani, held about 20.8 per cent stake in India Cements as on March 31. This stake was worth Rs 1,363 crore on Wednesday.        

LIC informed BSE that its holding in the stock since November 21, 2007 has fallen 2.042 percentage points to 3.833 per cent from 5.875 per cent. LIC had bought India Cedments at an average price of Rs 191.59. 

For the March quarter, India Cements posted Ebitda loss for the third-consecutive quarter due to continued weakness in cement prices and high operating costs.

While volumes grew 28 per cent sequentially, blended realisations trended down 6 pe cent QoQ.

Even though cost metrics improved sequentially, the improvement was insufficient for the company to break-even. Management plans to undertake a capex of Rs 600 crore over the next 18–24 months to improve operating efficiencies (WHRS, AFR etc.) and plans to sell land parcels to fund it.

"Given India Cements' long-standing concerns of high net debt and low future RoE, we maintain ‘REDUCE’ with a target of Rs 112, valued at 7.5 times Q4FY25E EV/Ebitda," Nuvama Institutuional Equities said in May.

The stock has an average target price of Rs 148, as per Trendlyne, which suggests 30 per cent downside potential.

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