Street View: Ambuja's Penna deal to heat up rivalry in southern India

Ramco Cements

14/06/2024 05:20

** Shares of India's Ambuja Cements  ABUJ.NS  up as much as
3.7% to record high of 689 rupees; Nifty 50  .NSEI  down 0.2%   
    ** Adani-owned co bought smaller rival Penna Cement
Industries  PENC.NS  in a $1.25 billion deal 
    ** Ambuja now among top 3 cement producers in south India
alongside UltraTech  ULTC.NS  and Ramco  TRCE.NS , Jefferies
says
        ** Ambuja said deal will help increase Adani's share in
India's southern cement market by ~8%
    
    SOUTHERN COMPETITION
    ** Jefferies ("buy", PT 735 rupees): Growing dominance of
ULTC post the Kesoram deal, and ABUJ suggest a competition for
market share in south India and is negative for regional firms
    ** Antique Stock Broking ("buy", PT 700 rupees): Short-term
pricing pain in southern markets may continue as ABUJ ramps up
Penna; ULTC, ABUJ to be key beneficiaries of increasing
consolidation 
    ** Emkay Research ("buy", PT 700 rupees): Deal to solidify
ABUJ's hold in "highly fragmented" southern markets; long-term
consolidation expected to improve pricing discipline   
    

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