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Motilal Oswal Report
ACC Ltd. and Ambuja Cements Ltd., both are net cash positive companies with a cumulative cash balance of Rs 84 billion (as of end June 2022).
Fundraising of Rs 200 billion can help the group to increase its cement capacities by 70 million tonnes per annum (25 mtpa inorganic expansion and 45 mtpa organic expansion) by CY26E without leveraging the balance sheet.
We have assumed $100/tonne and $130/tonne cost for organic and inorganic expansions respectively and we believe that combined net debt will be Rs 7 billion for ACC and Ambuja Cement in CY26E (we have not assumed improvement in profitability post CY24 or synergy benefits in our base case assumption).
Assuming synergy benefits of Rs 200 and Rs 300/tonne respectively for ACC and Ambuja Cements; net cash at CY26-end will be Rs 45 billion.
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