Why Adani Group's Ambuja Cements, ACC Are Shooting Higher Today

The Adani Group companies had been in dispute with Himachal Pradesh Trucker’s unions over transportation costs for over two months.

What Happened: The company on Monday informed that it had resolved the dispute over the freight rates in Himachal Pradesh ending the 67-day deadlock. This will mean that Ambuja Cements and ACC will resume operations at the Gagal and Darlaghat plants from today.

“All the stakeholders have come together and amicably resolved the ongoing discussions on the freight rates in Himachal Pradesh,” the company added.

See Also: Cement Stocks Extend Gains As Ultratech, Shree Cements Hit 52-Week High

The company informed that the new freight rates finalised with transporters for single axle trucks of 12 tonnes would be ₹10.30 a tonne per km. The earlier rates for the same were ₹11.41 for Gagal and ₹10.58 for Darlaghat units earlier.

New rates for multi-axle 24-tonne trucks would be ₹9.30 a tonne per km. The company said that this will result in an overall reduction of 10-12% in the freight rates “benefiting the customers of Himachal Pradesh.”

Why It Matters: This is a positive break for the companies that have been facing the brunt at the bourses since the Hindenburg report came out last month. The two plants in Himachal have a combined capacity of 7.5 million tonnes per annum. The 67-day stalemate that started on Dec.16, when the truckers went on strike was hurting all the stakeholders. The new rates are also a reduction from the earlier rates which is another positive for the company.

Price Action: ACC shares were up 0.28% to trade at ₹1,856 and Ambuja Cements was trading 0.61% higher at ₹355.45 as the markets opened on Tuesday.

Read Next: Mark Mobius Says Adani Saga Should Force People To Rethink ‘Passive Investing’

Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.

Posted In: ACCAdani GroupAmbuja CementGautam AdaniHindenburg Researchprice cutsTransportations