India Cements nears 52-week high, settles around 5% higher on the BSE

As per shareholding pattern data for the March quarter, Radhakishan Damani along with Gopikishan Damani holds around 20 per cent stake in the company

Shares of India Cements climbed as much as 10.5 per cent to Rs 139.30 apiece in the intra-day trade on the BSE on Wednesday, nearing its 52-week high of Rs 140, touched on May 26, 2020. The stock, however, pared gains later to settle at Rs 132, up around 5 per cent. 

So far in the calendar year 2020, the stock has rallied 85 per cent (as of Wednesday's close) as compared to around 19 per cent decline in the benchmark S&P BSE Sensex, exchange data shows. The stock had hit an all-time high of Rs 333 on December 14, 2007. 

As per reports, Radhakishan Damani, the promoter of Avenue Supermarts, that runs the supermarket chain D-Mart, is considering acquiring a controlling stake in India Cements. The report says that Damani has formally reached out to N Srinivasan to explore a takeover. 

Meanwhile, BSE has sought clarification from the company regarding the takeover buzz and the reply is awaited. 

As per shareholding pattern data for the March quarter, Radhakishan Damani along with Gopikishan Damani hold around 20 per cent stake in the company. CLICK HERE TO VIEW THE SHAREHOLDING PATTERN

Analysts at Centrum Broking, however, had retained the "Sell" rating on the stock post the development with the target price of Rs 55, saying the fundamentals of the company remain weak and the investor action (Damanis) has triggered the stock's valuations.  

India Cements' fundamentals continue to be weak and will remain weak given the current challenging environment. However, the investor action of the increasing stake from 4.73 per cent (end-3QFY20) to nearly 20 per cent by 4QFY20 by a prominent investor has kept the valuations elevated, the brokerage had said in a note dated May 18. 

"We continue with our earlier estimates of cut in the volumes of nearly 18 per cent /10 per cent in FY21/FY22. Our earnings estimates are also unchanged with the earnings before interest, taxes, depreciation, and amortisation (EBITDA)/tonne expected to hover nearly Rs 600/tn and the EBITDA downward revision by nearly 27 per cent/15 per cent for FY21/FY22 stays intact. Our take on more severe fall in earnings due to higher debt servicing at 92 per cent / 47 per cent for the same period also continues," Milind Raginwar, an analyst with the brokerage firm had written in the report. 

India Cements is scheduled to announce its results for the quarter and fiscal year ended March 31, 2020 on June 23. The stock had hit a 52-week low of Rs 67.90 on August 23, 2019.