1. 1986 by Sh. V.P. Singh [Input Credit] 2. 1991 by Dr. Manmohan Singh [Liberalisation] 3. 1997 by Sh. P. Chidambaram [Tax Relief] 4. 2000 by Sh. Yashwant Sinha [Enabled IT Boom] 5. Budget, 2021 by Smt. Nirmala Sitharaman [Infra]
#Adani family infuses ₹8339 cr in #AmbujaCement!
🔸Promoters have infused a total ₹20,000 cr in the company in three tranches over the last 20 months.
🔸Promoters stake have increased to 70.3% now from 63.2% in Dec-23.
A 🧵 on:
💡Decoding the move
📈 View
🩷 & 🔄 for better reach!
💡Decoding the move
The fund infusion and increase in stake suggests promoters' conviction and focus on cement business.
🔸This would also help Ambuja Cement in meeting its capex requirements through internal accruals.
🔸Company’s balance sheet is already strong with cash & bank balance at ₹8500 crore as of Dec-23.
🔸Ambuja plans to increase its consolidated capacity to 140 mtpa by FY28E from 77.6 mtpa at present which implies ~16% CAGR.
🔸Adani Cement targets to increase its market share to 20% by FY28 (from current 14%).
🔸Moreover, company is also in process of investing significantly in other operational efficiency measures like:
- optimizing raw material cost
- increasing share of green power
- non-fossil fuels
- logistical efficiency
📈 View
We believe that both Ambuja & ACC would benefit significantly in the coming period in terms of
🔸Strong volume growth led by aggressive capacity expansion plans
🔸Improvement in margins led by operational efficiency measures and positive operating leverage
IT: Ignore the noise, time to raise exposure
🔸Each of previous 3 corrections post CY08 matured after ~30% price decline and 6-7 quarter time correction
🔸We are in 7th quarter of downturn
After successfully achieving our target of 21400 for Nifty in CY2023. We bring you our CY2024 outlook
(1/n)
(2/n)
🟧 Our target for Nifty in CY2024 is 24,700 with important support at 18,800 levels
Rationale:
🔸Election year median return is 17%
🔸Decadal cycle return is 15%
🔸Chart projection suggest an upside of 16%
(3/n)
🟥 Nifty returns in General Election years
♦️ General Election cycle is a major phenomena in the equity markets, it is divided into 4 parts - election year, post- election year, midterm years & pre-election year
🟧 Outlook
🔸Heavyweight stocks from BFSI, Auto, Cement & Healthcare should lead Nifty towards 24200 levels in CY24
🔸We expect volatility to be sticky around current levels in coming months. Hence in the first half of 2024, one should adopt “Buy on dips” strategy
(3/n)
🟧Yearly Quant Picks for 2024
🔸Dalmia Bharat Cement
🔸Federal Bank
🔸Gail
🔸Hindustan Copper
🔸IPCA Labs
🔸Shriram Finance
🔸Execution pick-up of strong order-backlog
🔹With advanced state-of-theart infrastructure, CSL is adept with execution of diversified projects in both ship-building and ship-repair segments
(3/n)
🔹Order backlog of ~₹ 22Kcrore as of Sept-23 (8.4x TTM revenues) with pick-up in execution, provides strong revenue growth visibility in the coming years
🔹Capex in new dry-dock & ISRF projects to be completed by Q1FY25, would further expand manufacturing capacities