Shares of Heidelberg Cement surged over 8% on Tuesday to hit an intraday high of ₹194.80.
What Happened: The surge today comes as media reports suggest that JSW Cement is in preliminary talks with Germany’s Heidelberg Materials to acquire its India cement business. As per an ET report, the discussions, began after the JSW Group made an unsolicited offer to acquire Heidelberg’s 13.4 million-tonne-a-year cement businesses in India.
The report further stated that it remains uncertain whether Heidelberg will exit the Indian market through a direct sale or opt for a bidding process for the assets to increase the competitive intensity for the plants. This decision could also potentially open the gates for other prospective buyers.
The small-cap stock has been largely flat this year. On a year-to-date basis, the stock is up close to 3%. Brokerage have also remained wary of the stock. HDFC Securities maintained its ‘reduce’ rating on the stock with a price target of ₹160 after the company posted its Q1 results. In the absence of any major planned expansion for the next few years, we expect Heidelberg to continue to lose market share, the brokerage had noted its note.
Axis Direct also maintained its ‘hold’ rating on the stock with a price target of ₹165. The brokerage firm had noted that while the company’s revenue was in line its profit after tax missed the analyst’s estimates.
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Price Action: Heidelberg Cement’s share price was up 8.18% to trade at ₹193.70 in the mid-market hours of trading on Tuesday.
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