Shree Digvijay Cement advanced 5.15 per cent to Rs 91.60. Himadri Cements was up 5 per cen at Rs 47.19. Sagar Cements gained 4.46 per cent while Mangalam Cement added 3.42 per cent. 
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Shree Digvijay Cement advanced 5.15 per cent to Rs 91.60. Himadri Cements was up 5 per cen at Rs 47.19. Sagar Cements gained 4.46 per cent while Mangalam Cement added 3.42 per cent. The news of Adani group firm Ambuja Cements acquiring smallcap Sanghi Industries, which has a market capitalisation of roughly Rs 2,700 crore, for an enterprise value of Rs 5,000 crore, sent smallcap and midcap cement stocks soaring in Thursday's trade. In total, there were 23 cement stocks that gained up to 10 per cent at the time of writing this article.
Shares of Burnpur Cement climbed 9.80 per cent to Rs 5.04. Saurashtra Cement gained 6,08 per cent to Rs 62.80. Udaipur Cement Works advanced 5.75 per cent to Rs 26.68. Shree Digvijay Cement advanced 5.15 per cent to Rs 91.60. Himadri Cements was up 5 per cent at Rs 47.19. Sagar Cements gained 4.46 per cent while Mangalam Cement added 3.42 per cent.
"The Sanghi deal is having a rub-off on smallcap cement counters, as it has been roughly valued at $110 per tonne, which is a very good EV/tonne valuation. Many smallcap cement stocks are valued at $50-70 per tonne and, so, investors are revaluating those companies now," said G Chokkalingam, Founder at Equinomics.
Sanghi Industries hit its 5 per cent upper circuit limit at Rs 105.76. Ambuja Cements rose 3.59 per cent to Rs 477.50 while ACC, another Adani group cement maker, added 3.61 per cent to 2,042.85.
Ambuja Cements said it would acquire 56.74 per cent stake in Sanghi Industries from Ravi Sanghi and family and the entire acquisition would be funded through internal accruals. The acquisition will help Ambuja Cements strengthen its market leadership and increase its cement capacity to 73.6 mtpa from the current 67.5 mtpa. With the ongoing capex of 14 mtpa and with commissioning of 5.5 mtpa of cement capacity at Dahej and Amethain, the Adani group’s capacity will be 101 mtpa by 2025.
Adani Group chairman Gautam Adani said the acquisition was aimed at expanding Ambuja’s market presence and bolstering its product portfolio. Adani further mentioned that the Adani Group is well on course to achieve its targeted cement manufacturing capacity of 140 mpta by 2028 ahead of time.
"It’s a win-win scenario for both these entities, in our view. Ambuja Cements is evaluating various inorganic opportunities, which could help it reach its said target before the timeline," InCred Equities noted.
That said a few analysts believe the tailwind of lower raw material cost may be over and that competitive intensity in the sector may only rise ahead.
"While the Street has been visibly rejoicing the steep fall in the prices of pet coke and thermal coal, these seem to have bottomed out since nearly a month," said ICICI Securities,
It said prices have been on the rise since past two weeks, challenging fuel cost savings anticipated for Q4FY24.
"With formal capacity addition announcement by Shree Cement and Dalmia Bharat, guidance by industry leader UltraTech Cement to announce phase III of its expansions soon and expected additions by Adani Cement, the race for FY26 capacity built-up has already started," it said.
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