India Cements share slips 9% on weak Q3 show; net loss widens to Rs 429 cr

India Cements share price: Shares of India Cements, a unit of UltraTech Cement, plunged as much as 9.33 per cent to hit an intraday low of Rs 315.80 per share on Wednesday, January 22, 2025.

 

The fall in India Cements share price came on the back of weak results in the December quarter of financial year 2025 (Q3FY25).

 

The company’s net loss widened to Rs 428.84 crore in the December quarter of FY25 (Q3FY25), from a net loss of Rs 16.51 crore in the December quarter of FY24.

 

The company also posted an exceptional loss of Rs 190 crore in the quarter-ended December 31, 2024.

 

 

Meanwhile, the revenue from operations dropped 165 per cent Y-o-Y to Rs 903.2 crore in the Q3FY25, from Rs 1,081.9 crore in the Q3FY24. 

 

At the operating level, India Cements reported an earnings before interest, tax, depreciation and amortisation (Ebitda) loss of Rs 188.4 crore in the December quarter of FY25, as against an Ebitda profit of Rs 49 crore in the same quarter a year ago.

 

In December last year, the Competition Commission of India (CCI) approved a deal worth over Rs 7,000 crore, allowing UltraTech Cement, led by billionaire Kumar Mangalam Birla, to acquire a majority stake in India Cements Ltd.

 

Also Read: UltraTech Q3 Preview: Analysts eye QoQ rise in sales, profit on rising vol

 

According to Motilal Oswal, UltraTech Cement has acquired a 32.7 per cent stake in India Cements, increasing its total shareholding to 55.5 per cent. As a result, India Cements is now a subsidiary of UltraTech Cement. The development is expected to provide India Cements with several strategic advantages, including the implementation of new systems and processes, economies of scale, cost optimisation initiatives, and access to a broader distribution network.

 

India Cements aims to reinforce its presence in its core markets in the southern region. Analysts are now awaiting further clarity from the management regarding the transition and integration process under UltraTech Cement, along with details on profitability and future growth strategies.

 

Given the current scenario, analysts at Motilal Oswal have valued India Cements based on a replacement cost (EV/t of $100) and have set a target price of Rs 310. However, the brokerage maintained its 'Sell' rating. 

  Outlook

 

The company and its shareholders will benefit from synergy with its holding company with the introduction of new systems and processes, economies of scale, cost optimisation and a wider distribution network, said India Cements. 

 

The credit rating of the Company is already enhanced to AAA and will help to bring overall cost rationalization. 

 

India Cements is poised to grow stronger with increase in its sales, optimisation of costs and efficient operations. With the increasing government spending on infrastructure and the improvement in demand in housing markets, the company is well-positioned to strengthen its presence in its core markets and contribute to the overall growth aspirations of the country, it added. 

 

About India Cements  

 

India Cements, established in 1946, is among the largest cement manufacturers in India and a leading player in the South Indian market. The company was founded by S N N Sankaralinga Iyer and T S Narayanaswami, with its first manufacturing plant set up in 1949 at Talaiyuthu, Tamil Nadu. 

 

India Cements produces a range of cement products, including Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC). The company owns several well-known brands, such as Sankar Cement, Coramandel Cement, and Raasi Gold, which cater to diverse construction needs across the country.

 

Last checked, the market capitalisation of India Cements stood at Rs 9,817.54 crore, according to BSE.

 

At 11:07 AM, India Cements share was trading 9.04 per cent lower at Rs 316.80. In comparison, BSE Sensex was trading 0.54 per cent higher at 76,248.12 levels.