SOURCE : NEW18 NEWS
Last Updated:January 22, 2025, 14:44 IST
Shares of India Cements tumbled 13% to Rs 303 on January 22, following disappointing Q3FY25 results
India Cements (Representative image)
Shares of India Cements tumbled 13% to Rs 303 on January 22, following disappointing Q3FY25 results that highlighted the company’s growing financial challenges.
The company reported a significant widening of its standalone net loss for the quarter, which saw a sharp increase compared to the Rs 16.51 crore loss posted during the same period last year.
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Additionally, India Cements’ net sales for the quarter dropped by 17.35% YoY, falling to Rs 903.16 crore from Rs 1,081.88 crore in Q3 FY24.
The company’s Profit Before Interest, Taxes, Depreciation, and Amortization (PBIDT) also saw a steep decline, dropping to Rs 177.79 crore from Rs 265.89 crore in the same quarter of the previous year.
Operationally, India Cements recorded a cement capacity utilization of 57% for the quarter, while its domestic sales volume grew 5% YoY on a consolidated basis.
In December 2024, UltraTech acquired 32.72% of India Cements’ equity share capital, increasing its total shareholding in the company to 55.49%.
India Cements Share Price Performance
Over the past year, India Cements’ share price rose 26.74%, but it has declined by 9.25% over the last six months and 11.46% in the last three months. Year-to-date (YTD), the stock has fallen by 15.45%.
Analysts suggest that the acquisition by UltraTech could provide a much-needed boost to the struggling company. The synergies from UltraTech’s operational expertise, economies of scale, cost optimization, and vast distribution network are expected to improve India Cements’ competitiveness.
However, despite these strategic advantages, the near-term financial outlook remains challenging. Analysts at Motilal Oswal have maintained a ‘Sell’ rating on the stock, valuing India Cements based on a replacement cost (EV/t of $100) and setting a target price of Rs 310.
Of six analyst recommendations on Trendlyne, four analysts have a ‘strong sell’ rating, one has a ‘sell’ rating, and one suggests holding the stock.
The average target price for India Cements is Rs 225, indicating a 30% downside over the next year.
