Adani's ACC, Ambuja could boost capex, pressuring Indian cement firms-JPMorgan

Nuvoco Vistas

13/03/2023 09:29

** JP Morgan says Adani Group paying down $2.65 bln of the
$6.6 bln debt for Ambuja  ABUJ.NS  and ACC  ACC.NS  deals is a
negative for the Indian cement industry
    ** JPM says as debt overhang reduces, it opens up space for
ABUJ/ACC to increase capex and push for large capacity addition
    ** However, JPM notes, "Investor view on Indian Cement
stocks is essentially predicated on the Adani Group going slow
on capex"
    ** Now, large incumbents will have to cede capacity share or
react with new growth projects, even as price hikes have been
absent in seasonally strong Jan-March, says JPM
    ** ABUJ and ACC down 3.4% and 3.9%, respectively
    ** UltraTech Cement  ULTC.NS , Shree Cement  SHCM.NS ,
Dalmia Bharat  DALB.NS , Shree Cement  SHCM.NS  and Nuvoco
Vistas  NUVO.NS  down between 1.75% and 3.54%
    ** JPM 'overweight' only on DALB due to capacity growth from
internal accruals; brokerage has 'neutral' on ACC, ABUJ, ULTS
and 'underweight' on SHCM AND NUVO

 (Reporting by Hritam Mukherjee)
 ((Hritam.Mukherjee@thomsonreuters.com;))