ACC, Ambuja stocks gain about 3-5% each on improving growth outlook

Expansion in profitable regions expected to improve growth visibility and allay concerns on market share gain

The announcements on capacity expansions by Ambuja Cement and its subsidiary ACC have been cheered by the street. “Both stocks have gained about 3-5 per cent each over past two trading sessions on improving  growth outlook”. 

The capacity expansions should allay Street concerns on expansion and market share gains of these companies. Also, these expansions are primarily in the profitable regions of north and central India, where the industry’s clinker utilisations run at over 85 per cent and capacity, hence, are perceived as positive by analysts.

More important, the improving growth visibility would mean these companies could see valuation re-ratings,