Welcome to SensexBSE.com, the best stock analysis website in India, where we bring you daily updates and actionable insights on the Indian stock market. In today’s analysis, we take a deep dive into India Cements, which saw a significant surge in its share price following key regulatory approvals.
Key News and Updates
India Cements’ share price surged by nearly 11% on December 23 after the Competition Commission of India (CCI) approved a ₹7,000-crore deal.
- UltraTech Cement, promoted by Kumar Mangalam Birla, will acquire a majority stake in India Cements, consolidating its market leadership amidst growing competition from the Adani Group.
- CCI granted UltraTech the authority to acquire:
- 32.72% of India Cements’ equity share capital from promoters and promoter group.
- Up to 26% through an open offer.
The news led to a sharp rise in India Cements’ stock, touching ₹376.20, a jump of 10.92% in intraday trade on December 23.
Fundamental Analysis
Key Metrics:
- Market Cap: ₹11,346.89 Cr.
- P/E Ratio: 0 (Currently not profitable)
- Book Value (TTM): ₹153.89
- Debt: ₹2,601.23 Cr.
- Promoter Holding: 28.42% (with high pledging at 68.20%)
- EPS (TTM): ₹-7.37
- Sales Growth (3 Years): 3.66%
- Profit Growth (3 Years): -196.98%
Strengths:
- Efficient cash conversion cycle of -252.53 days indicates operational efficiency.
Limitations:
- High promoter pledging (68.20%) raises concerns about financial stability.
- Negative ROE (-4%) and ROCE (-0.18%) over the past 3 years highlight weak profitability.
- Poor revenue and profit growth in the last 3 years.
Technical Analysis
Chart Insights:
The daily chart shows a sharp breakout fueled by high volumes, supported by recent news.
- Key Resistance Levels: ₹380–₹400
- Key Support Levels: ₹350 and ₹320
Exponential Moving Averages (EMA):
- The 9-day EMA is above the 15-day EMA, indicating a short-term bullish trend.
Volume Analysis:
- High trading volumes support the upward momentum, with institutional activity playing a significant role.
Trade Setups
Short-Term Trade Considerations:
- Bullish Setup:
- Entry above ₹380.
- Target: ₹400–₹420.
- Stop-loss: ₹360.
- Bearish Setup:
- Entry below ₹350.
- Target: ₹320.
- Stop-loss: ₹370.
Long-Term Investment Considerations:
While the fundamentals are weak, the strategic partnership with UltraTech could offer long-term value if operational efficiencies improve. Investors should monitor promoter pledging levels and debt reduction initiatives before making decisions.
Why India Cements Is Featured on the Best Stock Analysis Website in India
At SensexBSE.com, we prioritize educational and data-driven insights, ensuring our readers stay updated on market trends. India Cements’ recent developments make it a stock to watch, especially as the cement sector gears up for increased competition and consolidation.
Important Disclaimer
This analysis is for educational purposes only and should not be considered financial advice. SensexBSE.com is not SEBI-registered. Readers should consult a SEBI-registered advisor for investment decisions.
Conclusion
India Cements’ recent share price movement reflects market optimism following the CCI’s approval of UltraTech’s acquisition. While short-term volatility may persist, traders and investors have opportunities to explore, backed by technical levels and institutional interest.
Stay tuned to SensexBSE.com for daily updates and stock insights, solidifying our position as the best stock analysis website in India for educational content.