HSBC has maintained a buy rating on Ambuja Cements and set a target price of ₹700, implying an upside of around 28% from the current market price of ₹546.75. The positive view follows the board’s approval of a major corporate restructuring within the Adani Group’s cement portfolio.
Ambuja Cements has approved the amalgamation of ACC and Orient Cement into Ambuja, with the process expected to be completed within the next twelve months. According to HSBC, the consolidation is a strategically positive move that simplifies the group structure and strengthens Ambuja’s position as the flagship listed cement entity.
Management has indicated that the merger is expected to unlock operational synergies, translating into cost savings of at least ₹100 per tonne. These benefits are likely to come from efficiencies in procurement, logistics, manufacturing optimisation and overhead rationalisation, as well as better utilisation of combined capacities.
HSBC believes the amalgamation will enhance scale benefits, improve cost competitiveness and support margin expansion over the medium term. The brokerage sees the integration as value accretive for Ambuja shareholders, reinforcing its constructive stance on the stock.
Disclaimer: This article is for informational purposes only. The views expressed are those of the brokerage and do not constitute investment advice or a recommendation to buy or sell any security.
