<ul><li>India's cement production will climb by around 6-8% over fiscal years 2023 and 2024. </li><li>A growing housing sector, which typically accounts for 60-65% of India's cement consumption, will remain a key demand driver. </li><li>In the Union Budget for fiscal 2024, the government allocated $1.8 billion to safe housing, clean drinking water and sanitation. </li></ul>Infrastructure-led investments and mass residential projects will keep India’s cement demand strong, according to a Moody’s Investors Service report. It also said that India's cement production will climb by around 6-8% over fiscal years 2023 and 2024, following a 21% jump in FY22. “A growing housing sector, which typically accounts for 60-65% of India's cement consumption, will remain a key demand driver. Also, continued large investments in roads and infrastructure projects will fuel cement demand,” said Moody’s. India built 12,000 kilometers of highways in 2022 alone and this momentum will likely continue in 2023 and 2024, supported by various government initiatives. Furthermore, in the Union Budget 2023-24, the government allocated $1.8 billion for the creation of safe housing, clean drinking water and sanitation, and increasing road and telecom connectivity, among other initiatives. The government has also allocated $9.6 billion to address urban housing shortages. Elevated costs to hit profitability While cement demand remained solid in the world's second-largest cement market for most of FY23, profitability slid sharply, largely owing to elevated costs of pet coke, coal and diesel. “A sequential, quarter-on-quarter, decline in these costs will prevent a further sharp decline in profitability, although a return to the unusually high profits cement producers enjoyed in fiscal 2022 is highly unlikely,” Moody’s said. The agency predicted that the EBITDA margin for leading pan-India cement producer UltraTech Cement, will fall to about 18% in FY23 and around the 20% mark in FY24. It had hit 23%-26% for FY22. Following the acquisition of Holcim's India cement operations by Adani group, several cement producers announced new capacity additions totaling 60 million tonnes that will likely keep capacity utilization under 70% and prevent sharp price increases. India’s cement production has been going up in the last few years, after seeing a drop FY21 to less than 300 million tonnes. Currently, it stands around 350 million tonnes and according to Moody’s it will steadily climb due to a robust infrastructure growth. SEE ALSO <a href="https://www.businessinsider.in/business/startups/news/catching-em-early-early-stage-startups-shine-as-their-investor-pool-widens/articleshow/97918089.cms">Catching ‘em early: Early-stage startups shine as their investor pool widens</a> <a href="https://www.businessinsider.in/business/news/passenger-vehicles-recorded-highest-ever-sales-this-january-says-siam/articleshow/97874958.cms">Passenger vehicles recorded highest-ever sales this January says SIAM</a>

Infra & housing projects to keep India’s cement demand strong: Moody’s

<ul><li>The cement industry saw the largest deal get sealed this week which is to change the fortunes of the sector for good.</li><li>The billionaire <keyword id="111343" type="General" weightage="20" keywordseo="gautam-adani" source="Orion">Gautam Adani</keyword> paid as much as $10.5 billion to buy Ambuja Cements and ACC — from Switzerland-based <keyword id="75756" type="General" weightage="20" keywordseo="holcim" source="Orion">Holcim</keyword>.</li><li>Analysts see robust long-term outlook for these companies along with hopes of higher-than-industry volume growth as Gautam Adani backs the firms.</li></ul>Whether or not to invest in shares of ACC and Ambuja Cements after Adani acquired them has become the talk of the town. A few days back, the billionaire Gautam Adani paid as much as $10.5 billion to buy Ambuja Cements and ACC — from Switzerland-based Holcim. While as much as the cement companies <a href="https://www.businessinsider.in/business/corporates/news/adani-group-companies-will-benefit-through-backward-integration-with-buyout-of-ambuja-and-acc-cement-companies/articleshow/91591119.cms">will benefit other infrastructure companies at Adani </a>with raw material, Ambuja Cements and ACC will become a dominant player in the industry. With the acquisition, <keyword id="6367820" type="General" weightage="20" keywordseo="adani-group" source="Orion">Adani Group</keyword> emerges as the second largest cement producer in the country with the highest capacity of 70 million tonnes annually. Now, the acquisition has led to mandatory open offers in both the companies, wherein the acquirer Adani will buy shares from the market at a fixed price. Adani has proposed to buy 48.96 million equity shares at ₹2,300 per share of ACC. Similarly, it will buy 516 million shares of Ambuja Cements at ₹385 per share. Shares of both the companies will be bought at premium to the current market price, which excites investors to buy stocks of the particular firm. Ambuja Cements and ACC to scale up capacity and volume growth post change of promoter While analysts believe stocks of both companies are bound to perform well with strong parentage, there are possibilities of various scenarios to take place that could impact the share price movement. These are some of the possibilities charted out by Nirmal Bang Institutional Equities. Case 1: Adani group could delist the shares of both companies post acquisition If the Adani group plans to delist the shares completely, then the premium paid for the open offer will be relatively higher. Case 2: Adani group keeps the shares listed post acquisition The Adani group is already paying a premium for the acquisition of ACC and Ambuja assets from the Holcim group. If they plan to keep both entities listed, then offering a higher premium for the open offer is not in the interest of the group. Case 3: ACC and Ambuja Cements to be merged and the combined entity continues to trade on the exchanges The Adani group can merge the two entities after the acquisition and then do equity dilution to take its overall stake below 75% to comply with listing norms. This is an ideal scenario for minority shareholders of both ACC and Ambuja, as the merged entity is likely to trade at a premium valuation and its overall growth profile is expected to be better Analysts suggest investors to pick stocks at dips and stay invested for a long term “We do believe that the long-term outlook for these companies is positive given the possibility of higher-than-industry volume growth, further improvement in efficiency and a possible merger at a later stage, thereby streamlining the company’s corporate structure,” said a report by Nirmal Bang. “Both of them are cement companies and can be scaled up after acquisition by Adani group but if we go by metrics ACC looks better,” said Manoj Dalmia, founder and director at Proficient equities. Dalmia believes ACC is better because earnings per share for ACC is higher at ₹99 and Ambuja has about ₹14. Meanwhile, Ravi Singh, vice president and head of research at Share India feels Ambuja Cements has better metrics than ACC “ACC and Ambuja both companies will be benefitted from this acquisition. However, Ambuja looks more robust on valuations terms, with bigger network coverage, higher profit margins, impressive cement capacity and better P/E growth as compared to ACC. On the Technical setup, ACC looks more aggressive and is in an accumulation zone which may push the stock upwards strongly. As both the companies look attractive for long term investments, we advise investors to invest in 60:40 ratio in Ambuja and ACC, to capture the opportunity. The long term target for Ambuja and ACC stands out at ₹420 and ₹2,450 respectively,” said Singh. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[<blockquote class="stocktwits-embedded-post" data-origin="https://stocktwits.com" data-id="460663897"> Even in Falling knife like this 2 Cement stocks in News are Fairly Holding Good.$ACC.NSE $AMBUJACEM.NSE Certainly the structure is Bullish.and these are Buy on Dips for Investors. &mdash; (@TrendonomicsHD) <a href="https://stocktwits.com/TrendonomicsHD/message/460663897"> May 19, 2022</a></blockquote><script async src="https://stocktwits.com/min/widgets.js" charset="utf-8"></script>]]></cdata></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/emudhra-ipo-checkout-financial-performance-business-outlook-analysts-view-in-10-points/slidelist/91681778.cms">eMudhra IPO: Checkout financial performance, business outlook, analysts view in 10 points</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/the-worst-for-indian-startups-is-yet-to-come-be-prepared-for-layoffs-unicorn-slowdown-and-startup-shutdowns-in-2022/articleshow/91681195.cms">The worst for Indian startups is yet to come — be prepared for layoffs, unicorn slowdown and startup shutdowns in 2022</a>

Both Ambuja Cements and ACC are bet worth investing with strong parent Adani

Adani group stocks stage a rebound led by Adani Enterprises: Group market capitalisation rises by ₹25,575 crore

Adani group stocks tumble, eroding ₹58,240 crore market capitalisation: All ten stocks close in red

The Adani effect: Ambuja Cements rallies 40% in one month – analysts suggest good days ahead for the cement industry

<ul><li>Given the size and scale of its portfolio, <keyword id="6367820" type="General" weightage="80" keywordseo="adani-group" source="Orion">Adani Group</keyword> is targeting a group valuation of $1 trillion.</li><li>Adani Group will play to its strengths and focus on its core verticals – mining, infrastructure and utilities. Businesses that fit well into the group’s overarching superstructure will become adjacencies like cement, copper and aluminum. </li><li>Adani Enterprises will continue to be the group’s incubator that currently houses new businesses. The Group is looking to hive off some of these new businesses like new energy, airports and roads over the next 2-4 years.</li></ul> The Adani Group’s market capitalisation has been the subject of much conversation in recent times, as the returns have taken many by surprise and propelled <keyword id="111343" type="General" weightage="50" keywordseo="gautam-adani" source="Orion">Gautam Adani</keyword> to the third spot on the list of the world’s richest people. The value of the group’s listed entities have zoomed from $16 bn in 2015 to $240 bn in 2022, but billionaire Gautam Adani’s ambition is to take his group’s value to $1 trillion. All the pieces of this strategy were put in place back in 2015. On 10 October, the group’s Chief Financial Officer Jugeshinder ‘Robbie’ Singh, narrated an incident outlining the group’s gambit to a roomful of high networth individuals in New Delhi. He said: “Whatever you see today, it might look like it has just happened in the last one or two years, but in reality what we have done – both GSA (Gautam Shantilal Adani) and myself – we discussed this in 2015. When the discussion happened, the group’s market cap was around $16 bn in 2015. Given what we had as a set of companies, we believed that if we had assets and companies of that type we should really be a $1 trillion group. So we went through the steps that we needed to take to get to the point.” <div type="image" title="Jugeshinder ‘Robbie’ Singh, Chief Financial Officer, Adani Group" msid="94857724" hostid="261" caption="&amp;lt;p&amp;gt;Jugeshinder &amp;#8216;Robbie&amp;#8217; Singh, Chief Financial Officer, Adani Group&amp;lt;/p&amp;gt;"></div> Since then, the Adani Group has set about building its infrastructure and logistics portfolio in a manner that it could emerge as the top five globally and not just India’s largest player. To achieve this goal, Singh said they took steps to transform the very way the group functioned at every level. “We came to the conclusion that a lot of the steps could be executed, When we concluded that we could (execute) these steps, both of us knew at the stage that if we didn’t achieve this, at least two people – Gautam Adani and me – would know we failed,” he added. Building It Brick By Brick While market experts have at times questioned the Group’s foray into cement, the Group is clear that it will play to its strengths and focus on its core – mining, infrastructure and utilities. And businesses that fit well into the group’s overarching superstructure will become adjacencies. Given that power and logistics are the largest components of any metals and materials business, the group has seen it fit to enter copper, aluminum and cement businesses. Power continues to be core to the Group’s future growth plans. And to this end, Adani Green is redefining the future of renewable energy. In 2020, Adani Green became the largest solar company in the world. Adani New Industries, which is currently within Adani Enterprises, will focus on the Group’s foray into the new energy business. Singh went on to explain to investors that for the first time in India’s history, a portfolio of a group has emerged that is the world’s top five in the entire sector. He said: “If you take the infrastructure portfolio of the Adani Group, then the core is among the top 5 in the world. If you take Adani Green, Adani Ports, Adani Total, Adani Transmission and Adani Power are in total among the world’s top five infra portfolios. It is the fastest growing portfolio. Our primary industry vertical materials, metal and mining again sits next to our core infra portfolio.” Not surprising then that Adani Ports and Special Economic Zones (APSEZ) was the first company to undergo a major transformation from being a mere ports operator to becoming an integrated port services and logistics player. According to Gautam Adani in his AGM speech, “Financial year 2021 was a transformational year. No company runs a port business of such scale and reach.” The company added LNG and LPG business to the portfolio. In all, Adani’s ports business moves $100 bn worth of trade every year. Why Entering The Materials Business Makes Sense for Adani? The Adani Group emerged as a surprise bidder for Holcim’s cement business in India earlier this year. While many believe it was a foray into an unrelated business, the Group has compelling reasons behind it. Whether it is building materials like paints and cement or metals, 74% of the cost in these businesses comprise of three things – transport and logistics, power and extraction. Singh believes that the cement industry is like any materials industry, where infra and energy are core components. Explains Singh, “We never looked at cement as a manufacturing business. We believe that the Indian cement industry is horrifically inefficient. And we can bring efficient logistics and power to it. Anyone who has predicted the EBITDA of ACC and Ambuja will be wrong by a factor in the next 9-12 months. The same thing is true for copper and aluminum.” <div type="image" title="Jugeshinder ‘Robbie’ Singh on Adani Group entering the cement business" msid="94857795" hostid="261" caption="&amp;lt;p&amp;gt;Jugeshinder &amp;#8216;Robbie&amp;#8217; Singh on Adani Group entering the cement business&amp;lt;/p&amp;gt;"></div> Given that Adani Group has all the clearances, it can deliver the key raw materials at a better price.The group already is the largest mining services player in the country and which is why it believes that the development cost of its copper smelter would be a third of the cost of any other developer in the country and aluminum would be the same. “So when you hear we are buying XYZ, I would like you to see in this chart that broadly 100% of our investments are core infra or adjacent areas. We do not do anything outside of this,” said Singh to investors. Surplus Cash &amp; Credit Rating Higher Than Sovereign: Group is generating cash faster than it can deploy Most businesses of the Adani Group enjoy the best in class margins. The ports business has reported operating margins of 70%, while its closest competitor’s margins are at 56%. Adani Total Gas has reported margins of 41%, while Adani Tranmission’s operating margin is at 92%. The businesses are profitable and efficient and generate high levels of free cash flows. The growth, explains Singh, is higher than even some tech companies. The group currently generates earnings before interest, tax, depreciation and amortization of $8 bn. Of this $8 bn, approximately $3.6 bn is spent on servicing debt (interest and principal). Of the remaining $4.4 bn, the group spends $700 mn towards tax. Businesses spend $1.8 bn towards capex, while the remaining the group is unable to deploy. While in absolute terms the Group’s debt has gone up, but so has its EBITDA, explains Singh. Over the last nine years, the Group’s EBITDA has grown 23% CAGR, while debt has grown by 12%. Nearly 41% of Adani’s portfolio has the same credit rating as that of the Government of India. “We are rated higher than the banks so if we keep the money there, then it is a problem for us,” adds Singh. According to the Group’s CFO Robbie Singh, soon enough the group will have a company in its portfolio, with all its business in India, that will be rated higher than the Government of India. Global Relationships and Capital Drive Growth The Group’s portfolio has evoked interest from global partners like TotalEnergies and even global funds like International Holding Company. TotalEnergies has expanded its investment across the portfolio of companies. Total Energies has invested $4 bn across <keyword id="4929350" type="General" weightage="20" keywordseo="adani-group-companies" source="Orion">Adani Group companies</keyword> and it is the French company’s largest single minority position in the world. IHC has also invested $2 bn across group companies. The Adani Group has deep relationships with most Indian banks, but since they have group exposure limits, Group Adani cannot grow if it is only dependent on Indian banks. Almost the entire European banking system has relationships with Adani Group along with leading investment banks from the US and Japan. The group has not only raised $16 bn capital in the last three years to fuel growth, but has also run one of the largest equity capital programmes, which is almost the same size as that of Reliance Jio. Adani Enterprises to act as the Group’s Incubator Adani Enterprises has been positioned as the group’s incubator. The group is currently nurturing several new businesses under the aegis of AEL till they become independent and can fund their own capital expenditure plans. The Group believes that it should not be valued on the basis of P/E multiple as its business is the incubation of new businesses. For instance, Adani New Industries is the green hydrogen business under AEL for which the Group has committed capex of $50 bn over the next 10 years. Apart from the new energy venture, data centers, airports and the roads businesses will sit inside AEL till they can be independent and support their own growth ambitions. The Group is looking to hive off some of these new businesses over the next 2-4 years. To be outside of Adani Enterprises, businesses need to meet two conditions: 1) They can sustain their growth on their own and not need money from shareholders. 2) There can be no financial cross holdings. When a business can stand on its feet, it will be demerged from AEL, explains Singh. In the next 2-3 years, hydrogen, airports and transmission businesses can be demerged when they can be independent. But from the look of it, Adani Group’s transformation is a 25-year story of growth and ambition. <div type="image" title="Adani: A world class infrastructure and utility portfolio" msid="94857846" hostid="261" caption="&amp;lt;p&amp;gt;Adani: A world class infrastructure and utility portfolio&amp;lt;/p&amp;gt;"></div>SEE ALSO <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/it-cos-go-slow-on-hiring-despite-high-attrition-rates-hiring-down-57-in-q2/articleshow/94832706.cms">IT majors cut down their hiring by half despite high attrition</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/infosys-shares-surge-after-q2-results-9300-buyback-announcement/articleshow/94850939.cms">Infosys shares surge after Q2 results, ₹9,300 crore buyback announcement</a>

Gautam Adani puts in place plan to take Group valuation to $1 trillion

After a round of musical chairs, Musk, Gates and Adani are among 2022’s top 5 billionaires

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/55655ecbdd0895515a8b45e1-1200-924/the-queen.jpg" border="0" alt="The Queen">REUTERS/Cathal McNaughtonBritain's Queen Elizabeth inspects the 1st Battalion Welsh Guards before presenting them with New Colours at Windsor Castle, England April 30, 2015.</img></div></div></div>Good morning! Here are 10 things you need to know in markets today.German consumer confidence just smashed to a new 14 year high for the June survey, according to GfK's latest release. The survey hit a high of 10.2, the strongest since 2001. The May survey recorded a score of 10.1. Analysts were expecting the measure to drop very marginally, down to 10.Bernanke doesn't see anything extreme in US markets. Former Federal Reserve Chairman Ben Bernanke said on Wednesday there were no signs of extreme movements in the US real estate and financial markets. "<a href="http://uk.businessinsider.com/r-bernanke-sees-no-extreme-moves-in-us-markets-asset-prices-2015-5#ixzz3bJZvxHpF">As long as the financial system is healthy, even if there's movement in prices that's OK. I don't see anything that's extreme</a>," Bernanke said when asked if he was worried about asset price bubbles in the United States.But current Fed vice chair Stanley Fischer expects spill-over effects when rates do rise. "<a href="http://uk.businessinsider.com/feds-fischer-on-normalizing-monetary-policy-2015-5">We should also expect spillovers when monetary policy is tightened</a>," said Fischer, speaking at Tel Aviv University. "Central bank communications can be a tricky business." The Queen is about to open parliament and announce the EU referendum. <a href="http://www.businessinsider.com/r-queen-elizabeth-to-unveil-eu-referendum-plans-as-uk-parliament-opens-2015-5#ixzz3bJZHgWLQ">Britain's Queen Elizabeth will set out the government's plans for a European Union membership referendum on Wednesday</a> as Prime Minister David Cameron faces pressure to explain when it will be held and what changes to the EU he wants before then. Snapchat's CEO wants the company to float. Snapchat CEO Evan Spiegel doesn't plan on getting acquired, he said on stage at Re/code's Code Conference Tuesday evening. <a href="http://uk.businessinsider.com/snapchat-ceo-evan-spiegel-we-need-to-ipo-2015-5#ixzz3bJbDP2t9">"We need to IPO," he said. "We have a plan to do that."</a> Libya's premier says he survived an assassination attempt. Libya's official premier Abdullah al-Thinni said <a href="http://www.businessinsider.com/r-libyas-premier-thinni-says-he-survived-assassination-attempt-2015-5#ixzz3bJZ0cueZ">he survived an assassination attempt after leaving a parliamentary session on Tuesday in the eastern city of Tobruk</a>. "Thank God, we managed to escape," he told pan-Arab news channel al-Arabiya. Holcim and Lafarge just finalised their post-merger executive committee. Swiss cement maker Holcim and French merger partner Lafarge said on Wednesday they had <a href="http://www.businessinsider.com/r-lafarge-holcim-finalize-members-of-future-executive-panel-2015-5#ixzz3bJZYJfR0">finalised the make-up of the future 10-member executive committee of the combined LafargeHolcim</a>. Asian markets are down. Japan's Nikkei is effectively flat, down just 0.02%, but The Shanghai Composite Index is down further, 0.29% below Tuesday's close. Hong Kong's Hang Seng is also 0.79% lower.A former Petrobras executive was jailed in Brazil. A Brazilian judge on Tuesday jailed a former executive with Brazil's state-owned oil giant Petrobras for five years for his role in a huge graft scandal after evidence emerged of a massive kickbacks scandal benefiting politicians. <a href="http://www.businessinsider.com/afp-former-petrobras-executive-handed-5-years-jail-for-graft-2015-5#ixzz3bJYoRvD0">Nestor Cervero, former director of Petrobras' international division, was found guilty of money laundering</a>. The Irish government is selling its airline stake. <a href="http://www.businessinsider.com/afp-irish-government-to-sell-aer-lingus-stake-to-iag-2015-5">The Irish government is to sell its 25% stake in flag carrier Aer Lingus to British Airways owner International Airlines Group</a>, the transport minister said on Tuesday. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/new-omega-globemaster-watch-unboxing-2015-5">Forget the Apple Watch - here's the new watch everyone on Wall Street wants</a></h3> <div> <div> <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5iaDNwdDrYYMm2yipFb14ndbRkPnemqO" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> <script> if (typeof RunFunctions === 'undefined') { var RunFunctions = []; } RunFunctions.push(function() { var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', '5iaDNwdDrYYMm2yipFb14ndbRkPnemqO',{ autoplay: 'false' }); }); </script> <noscript><div>Please enable Javascript to watch this video</div></noscript></div> </div> <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script> </div>

You Searched For "holcim margins" and got 8 results

Infra & housing projects to keep India’s cement demand strong: Moody’s

Anagh Pal

Both Ambuja Cements and ACC are bet worth investing with strong parent Adani

Bhakti Makwana

Adani group stocks stage a rebound led by Adani Enterprises: Group market capitalisation rises by ₹25,575 crore

Rounak Jain

Adani group stocks tumble, eroding ₹58,240 crore market capitalisation: All ten stocks close in red

Rounak Jain

The Adani effect: Ambuja Cements rallies 40% in one month – analysts suggest good days ahead for the cement industry

Rounak Jain

Gautam Adani puts in place plan to take Group valuation to $1 trillion

Malini Bhupta

After a round of musical chairs, Musk, Gates and Adani are among 2022’s top 5 billionaires

Rounak Jain

10 things you need to know before European markets open

Mike Bird