India Cements’ Shares Gain After Damani Brothers Raise Stake

Shares of India Cements Ltd. snapped their three-session losing streak after the Damani family raised stakes in the south-based cement maker.

Radhakishan Damani increased his individual stake to 11.34% as of December 2020 from 10.8% at the September-quarter end, according to shareholding data released by the company on the bourses. Billionaire Gopikishan Damani, younger brother of D-Mart supermarket chain founder Radhakishan Damani, also increased his holding to 8.46% from 8.26% as of September.

The retail tycoon and his family have been piling on shares of India Cements for some months, with their total holding now at 21.14% against 20.4% as of September. Bloomberg in June had reported that Radhakishan Damani was considering acquiring a controlling stake in India Cements. He had informally reached out to N Srinivasan, the controlling shareholder of the company, to explore a takeover, the report said citing people aware of the matter. According to the latest shareholding, promoter and promoter group holds 28.42% in India Cements.

The interest of Damani family in the company has been propping up the stock, which more than doubled from its 52-week low of Rs 69.55 in February 2020. Yet, analysts remain cautious.

“Volume for the December quarter is likely to decline 12% year-on-year, while realisations may improve 7.8% over the last year,” Sanjeev Kumar Singh of Emkay Global, said in a Jan. 12 note. The brokerage also expects an increase in the company’s operating expenditure per tonne to rise 2.1% over the year earlier, owing to lower volumes.

Shares of India Cements gained as much as 6.5% to Rs 172 apiece on Tuesday. The stock has gained only twice in the last 12 trading sessions. Of the 12 analysts tracking the company, two each have a ‘buy’ and ‘hold’ rating, while eight suggest a ‘sell’. The stock is trading 30.2% higher than its Bloomberg consensus 12-month price target of Rs 119.4 apiece.