The Adani Effect: Ambuja Cements Gains 40% In One Month; Experts Say Cement Investors Have Bright Days Ahead.
Gautam Adani's purchase of Ambuja Cements and ACC from Holcim has boosted investor value by over 40,000 crores in the previous month. Analysts think it will be a while before the two cement majors improve their leading operational indicators. Analysts believe the Indian cement sector is 'well-poised' because of an upcycle in demand and upcoming consolidation.
Gautam Adani's purchase of Ambuja and ACC from Holcim has boosted both equities, adding over 40,000 crores to investor wealth in the previous month. Both cement firms have been affected by Adani.
Despite the surge in Ambuja and ACC, UltraTech, Shree Cement, and Dalmia Bharat have underperformed. Analysts believe the Indian cement sector is prepared for a multi-year demand to upcycle, unlike in 2010. Instead of creating new capacity, the current upcycle will concentrate on consolidation.
Morgan Stanley analysts agreed that Ambuja Cements' capital injection is a medium-term net positive for the cement sector. Now, additional capacity is centred on more prominent players, and the research said this decreases the likelihood of unnecessary capacity expansions in this cycle, indicating margins might stay intact.
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12-2025
