India Cements Share Price Analyzed

India Cements, a major cement maker, is getting a fresh look from analysts. ICICI Securities has given the stock a ‘Hold’ rating, based on changes happening at the company. These changes are driven by UltraTech Cement, the new owner, and involve plans to improve how the company makes money.

Key Points

• UltraTech aims for ₹1,000 Ebitda per tonne by 2028.
• Major investments in renewable energy & cooler upgrades planned.
• Capacity expansion to 17.55 million tonnes by 2028.
• Brand changes targeted to boost sales and profits.
• Stock valued at 12x FY28E EV/Ebitda, target price ₹422.
• Merger with UltraTech uncertain, timing and ratio unclear.

The biggest change is that UltraTech Cement now controls India Cements. They have a plan to make the company earn more money – called Ebitda – by about ₹1,000 per tonne by 2028. This is a significant increase from the ₹334 they made in the recent past.

To reach this goal, India Cements is investing a lot of money. They’re building bigger systems to capture heat and turn it into electricity, which will increase their use of green power from 5% to 80% by 2028. They’re also changing how they make cement – using newer machines that save energy.

The company also wants to make more cement – increasing its capacity from 14.75 million tonnes to 17.55 million tonnes by 2028. They’re also changing the brand, which should help them sell more cement for higher prices.

However, analysts think even with these improvements, India Cements’ profits won’t be super high. It will be similar to other big cement companies in South India, and their profits likely won’t grow as fast as they’d like.

UltraTech says they might merge with India Cements sometime in the next two years, but they don’t know exactly when or how much each company will pay the other. Independent experts will decide these things, so it’s still a big question mark.

ICICI Securities believes the best way to value this stock is by multiplying its expected profits by 12. This suggests a target price of ₹422. The stock went up to this target price today, gaining nearly 2%.

Disclaimer: The target price and stock outlook are suggestions from ICICI Securities.

Ultimately, while changes are underway, the company’s future performance hinges on UltraTech’s strategic decisions.