India Cements, Ashok Leyland and Kaynes Technology India scale to a fresh 52-week high; here’s why

Benchmark indices, NIFTY50 traded at 24,869 up by 0.13% or 34 points and SENSEX was up by 0.20% or 168 points. The Nifty Bank was seen outperforming on Monday as it surged over 1% up by 570 points at 51,868. India VIX rose by 4% to 12.73 level.

The broad market indices outperformed the frontline gauge with Nifty Midcap 100 and Nifty Smallcap 100 up by 0.92% and 1.18%, respectively. Majority of the sectoral indices traded in green led by Nifty PSU Bank and Nifty Realty.

Three stocks that hit a fresh 52-week high on Monday, July 29, 2024

Kumar Mangalam Birla has finally clinched a decisive deal with N Srinivasan and his family to purchase their cement business at ₹3,954 crore in a move to consolidate his position as India’s major builder materials manufacturer.

UltraTech Cement, which is a part of Aditya Birla conglomerate, will acquire around 32.7% stake in India Cements by buying shares at ₹390 each. This follows UltraTech’s acquisition last month of 22.77% stake in India Cements at the rate of ₹268 per share. By means of this recent acquisition, the majority shareholder in Indian Cement would be Ultra Tech holding about 55.5% interest.

Furthermore, under India's takeover regulations UltraTech can make an open offer for the remaining 26% public shareholders’ stake at the same price per share of ₹390. If approved by regulators, this acquisition will significantly enhance UltraTech’s presence in the highly fragmented and rapidly expanding southern market.

The rally in the stock price is seen on the back of growth outlook improving and strong margin guidance sustained. The management aims to deliver mid-teen EBITDA margin in the near as well as long term. The growth in margin will be delivered through a robust product portfolio in MHCV (Medium & Heavy Commercial Vehicle) & LCV (Light Commercial Vehicle) category. Furthermore, it aims to up its market share in the respective categories.

For FY25, Ashok Leyland aims to launch 6 products of which 2 have been already launched and remaining 4 will be launched in upcoming quarters of the current fiscal. Overall, management remains optimistic on growth prospects and expects to deliver better profitability.

The strong Q1FY25 results with net profit more than doubled to ₹50.78 crore and with sales witnessed a growth of about 70%. Along with this, the order book swelled to over ₹5,000 crore as of June, 2024. These have been key catalysts for driving the stock prices higher.