Damanis hike stake in India Cements in Q3 to 21%; stock jumps 6%


The promoter of Avenue Supermarts and billionaire investor Radhakishan Damani, along with brother Gopikishan S Damani, hiked stake in during the December 2020 quarter following a stellar performance by the firm from its 52-week low level scaled in February last year.

increased stake in the firm by 0.54 per cent in the third quarter of FY21. He held 3,51,32,665 shares or 11.34 per cent stake in the company at the end of December quarter against 3,34,52,777 shares or 10.8 per cent stake at the end of September quarter.

At the same time, his brother Gopikishan Shivkishan Damani owned 8.46 per cent of the total paid-up capital in the company in Q3 as against 8.26 per cent in Q2. Besides that, Damani brothers together hold another 1.34 per cent stake in the firm.

Following this development, shares of the firm rose 6.5 per cent on the to Rs 172. From its 52-week low of Rs 69.60, the scrip has rallied over 130 per cent.

Together, Damanis hold 21.14 per cent stake in the firm as against 28.42 per cent held by the promoters.

The Damani family has been steadily increasing their holding in At the end of December quarter last year, the ace investor held a mere 4.73 per cent stake in the cement maker. His brother Gopikishan was not among shareholders with over 1 per cent stake in

A Bloomberg report in June last year had said that is considering acquiring a controlling stake in India Cements but the firm had later denied the same. READ HERE

Meanwhile, foreign portfolio investors increased shareholding in the firm to 12.42 per cent in the December quarter from 11.95 per cent in the September quarter. Whereas, mutual funds trimmed their holding to 3.76 per cent from 3.92 per cent in the same period.

Earnings Outlook

Brokerage Sharekhan has a positive view on the “Cement companies’ net earnings are likely to grow strongly, led by healthy volume growth and higher operational profitability,” it said.

Going ahead, analysts at Emkay Global expect India Cements to post Q3 net profit of Rs 53.7 crore against a loss of Rs 54 crore posted in the same period last year. However, sequentially, the net profit is expected to fall 25 per cent.

“Volume is expected to decline 12 per cent year-on-year (YoY) while realization may improve 7.8 per cent YoY. Opex/ton may increase 2.1 per cent YoY on lower volumes. EBITDA is expected to increase 59.4 per cent YoY with 7.3 pp improvement in OPM on higher realization,” said analysts at Emkay in a preview report.

The company is slated to announce its Q3 numbers on January 27, 2021.

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