Ambuja Cement Acquires Sanghi Industries at Rs 5000 Crore: Q1 Results Revealed

Adani Group’s Ambuja Cements Ltd (ACL) has made headlines today by revealing its acquisition of Sanghi Industries Ltd (SIL) for an enterprise value of Rs 5,000 crore. The deal involves Ambuja Cement purchasing 56.74% of Sanghi Industries shares from its current promoter group, Ravi Sanghi & family. Moreover, the entire acquisition will be financed through internal accruals.

Furthermore, the company also announced in its latest exchange filing that company is also planning to make an open offer to the public shareholders of Sanghi Industries. This offer is to buy up to 26% of the voting share capital from the public shareholders. 

Comparing both companies’ share prices, Ambuja Cement began the day at Rs 464.25, showing a 1% increase from the previous day’s closing price of Rs 460.95. In the intraday session, the stock reached a high of Rs 480.90 and is currently trading at Rs 474.40, representing a 2.90% rise from the previous day’s closing price. 

On the other hand, Sanghi Industries started the day at Rs 105.76, displaying a 4.99% increase from the previous day’s closing price of Rs 100.73. During the intraday trading session, the stock hit a high of Rs 105.76 and is currently locked in an upper circuit with a price increase of 5%, at Rs 105.76 on the BSE. 

Declaring the acquisition of Sanghi Industries by Adani Group company, Gautam Adani, Chairman of the Adani Group said, “This landmark acquisition is a significant step forward in Ambuja Cements’ accelerating growth journey,” adding, “By joining hands with SIL, Ambuja is poised to expand its market presence, strengthen its product portfolio, and reinforce its position as a leader in the construction materials sector.”

“With this acquisition, the Adani Group is well on course to achieve its target of 140 MTPA of cement manufacturing capacity by 2028 ahead of time. With SIL’s limestone reserves of a billion tonnes, ACL will increase the cement capacity at Sanghipuram to 15 MTPA in the next two years. ACL will also invest in expanding the captive port at Sanghipuram to handle larger vessels. Our aim is to make SIL the lowest-cost producer of Clinker in the country,” he further added.

Ambuja Cement recently released its first-quarter results on August 2. The company’s revenue experienced a growth of 8.47%, rising from Rs 8033 crore to Rs 8713 crore compared to the same quarter in the previous year. 

Furthermore, the company’s operating profit surged significantly, reaching Rs 1667 crore from Rs 865 crore, resulting in an improved operating profit margin of 19%, up from the previous 14%. 

As for the net profit, Ambuja Cement achieved Rs 1135 crore during the quarter, compared to Rs 865 crore in the same period of the previous year. 

Ambuja, along with its subsidiary ACC, possesses a combined capacity of 67.5 million tonnes through 14 integrated cement manufacturing plants and 16 cement grinding units spread across India. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.