Ambuja Cements rose 2.21% to Rs 679.70 following the announcement of its acquisition of a 100% stake in Penna Cement Industries (PCIL) for an enterprise value of Rs 10,422 crore. The company confirmed it has entered into a binding agreement to purchase all shares of PCIL from its current promoter group, P. Pratap Reddy and family, aiming to reach a capacity of 140 MTPA by 2028. The acquisition will be entirely financed through internal accruals.
PCIL has a cement capacity of 14 MTPA, with 10 MTPA currently operational. The remaining capacity is under construction at Krishnapatnam (2 MTPA) and Jodhpur (2 MTPA) and is expected to be completed within 6 to 12 months. Approximately 90% of this capacity includes railway sidings, and some facilities are supported by captive power plants and waste heat recovery systems. Additionally, surplus clinker at the Jodhpur plant will support an extra 3 MTPA of cement grinding capacity, beyond the existing 14 MTPA.
This acquisition aligns with Ambuja’s strategy to expand its footprint in the cement manufacturing market and is projected to be finalized within 3-4 months. Ajay Kapur, CEO & whole-time director of Ambuja Cement, stated that acquiring PCIL will enhance Ambuja's market presence in southern India and strengthen its position as a pan-India leader in the cement industry. He highlighted that PCIL's strategic location and ample limestone reserves offer opportunities to boost cement capacity through debottlenecking and further investments. The bulk cement terminals (BCTs) will be particularly transformative, providing access to eastern and southern India, and facilitating entry to Sri Lanka via sea routes. Ambuja aims to make PCIL highly competitive in terms of cost and productivity and improve its operating performance.
Ambuja Cements, a major cement producer in India, is engaged in manufacturing and marketing cement and clinker for both domestic and export markets. The company’s consolidated net profit surged 63.61% to Rs 1,055.16 crore in Q4 FY24 from Rs 644.94 crore in Q4 FY23. Revenue from operations in the March quarter was Rs 8,893.99 crore, up 11.65% from Rs 7,965.98 crore in the same period last year.
