ACC–Orient Cement Merger: Should you buy Ambuja Cement stock? Know analysts' view

Ambuja Cements Share Price Target: Gautam Adani-backed Ambuja Cements has approved the merger of its subsidiaries ACC Ltd and Orient Cement with the parent company to create a single, integrated cement platform. The move is aimed at simplifying the group’s structure and strengthening its pan-India cement presence, the company said.

Following the announcement, shares of Ambuja Cements are expected to remain in focus in today’s session, with investors and traders assessing what action to take on the stock.

Brokerage firm Antique Stock Broking has maintained its ‘buy’ rating on Ambuja Cements with an unchanged target price, expecting a gain of nearly 30 per cent.

According to the brokerage, the merger will help simplify Ambuja Cements’ corporate structure and lead to cost savings of around Rs 100 per tonne.

Antique expects the restructuring to be largely value neutral in the near term but sees meaningful cost savings and margin expansion over the medium term. It has factored in a 13 per cent consolidated volume CAGR over FY25–FY28E.

The brokerage also expects EBITDA per tonne to rise from Rs 1,066 in FY26E to Rs 1,175 in FY27E and Rs 1,251 in FY28E, supported by operating leverage and efficiency gains.

What the merger means for investors

The consolidation is expected to improve operational efficiency, optimise logistics and deliver cost synergies over the medium term. Management believes the unified structure will enable better capital allocation and faster execution across regions.

Under the approved scheme, Ambuja Cements will issue equity shares to shareholders of ACC and Orient Cement. ACC shareholders will receive 328 equity shares of Rs 2 each for every 100 equity shares of Rs 10 each, while Orient Cement shareholders will receive 33 equity shares of Rs 2 each for every 100 equity shares of Re 1 each held.

The merger of Sanghi Industries and Penna Cement with Ambuja Cements, which was approved in December last year, is currently awaiting statutory approvals.

Ambuja Cements share price target

Antique Stock Broking has recommended the Adani Group cement major with a target price of Rs 690 per share, implying an upside potential of 27.84 per cent from Monday’s closing level.

Post-merger, ACC Ltd, Orient Cement, Penna Cement and Sanghi Industries will operate as part of Ambuja Cements. The combined entity will have a cement production capacity of 107 million tonnes per annum (MTPA), placing it among India’s largest cement manufacturers.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)