Morgan Stanley has maintained its overweight rating on Ambuja Cement with a target price of ₹650 per share after the company’s board approved the amalgamation of ACC and Orient Cement into Ambuja. The brokerage described the development as strategically positive, as it removes the long-standing overhang of managing multiple listed cement entities within the group.
Under the proposed structure, Ambuja Cement will issue shares in the ratio of 328:100 to ACC shareholders and 33:100 to Orient Cement shareholders. Morgan Stanley said the swap ratios are broadly neutral for ACC’s minority shareholders while being value-accretive for minority shareholders of Orient Cement. The brokerage added that the consolidation simplifies the corporate structure and is likely to enhance capital allocation flexibility over time.
According to Morgan Stanley, the company expects meaningful operational synergies from the amalgamation, including at least ₹100 per tonne in cost savings driven by efficiencies across logistics, procurement and overhead rationalisation. These synergies are expected to support margin expansion and improve return metrics as scale benefits accrue across the combined entity.
The brokerage also noted that consolidation strengthens Ambuja’s positioning as the flagship cement platform within the group, improving visibility on earnings and strategy. Morgan Stanley views the transaction as a net positive for Ambuja’s long-term growth and profitability profile, subject to the completion of regulatory and shareholder approvals.
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