Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> ("ADL") on Tuesday announced a Board Meeting for Friday to consider capital raising options. Multiple media sources suggest a record Indian Follow-on Public Offering of INR200bn.</li>
<li>The company has bid for/bought multiple assets recently, and proposed investments plan of up to US$150bn in 10yrs in renewables, cement, airports, healthcare to aim at a US$1trln valuation.</li>
<li>This will get complicated, interesting, and is not necessarily going to come out well.</li>
</ul>



Adani Enterprises (ADE IN) ("ADL") on Tuesday announced a Board Meeting for Friday to consider capital raising options. Multiple media sources suggest a record Indian Follow-on Public Offering of INR200bn.
The company has bid for/bought multiple assets recently, and proposed investments plan of up to US$150bn in 10yrs in renewables, cement, airports, healthcare to aim at a US$1trln valuation.
This will get complicated, interesting, and is not necessarily going to come out well.


Adani Enterprises - A Record Follow-On Public Offering May Be in the Works

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Healthy volumes; mixed pricing trend across regions: We estimate our coverage universe of 15 companies to deliver 8% YoY volume growth (three-year CAGR: 8%) in Q2FY23</li><li>We estimate average utilisation of ~71% vs 78/70% QoQ/YoY. In our view, cement prices fell ~3% QoQ on pan-India basis in Q2</li><li>Prices fell 5-6% QoQ each in north and central regions, 3-4% each in east and west regions and ~1-2% in south</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Healthy volumes; mixed pricing trend across regions: We estimate our coverage universe of 15 companies to deliver 8% YoY volume growth (three-year CAGR: 8%) in Q2FY23We estimate average utilisation of ~71% vs 78/70% QoQ/YoY. In our view, cement prices fell ~3% QoQ on pan-India basis in Q2Prices fell 5-6% QoQ each in north and central regions, 3-4% each in east and west regions and ~1-2% in southContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement (Q2FY23 Results Preview): Healthy offtake; costs to peak out in Q2

External broker reports(aggregated public sources), Axis Direct

Axis Direct

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Traditionally Q2 is a soft quarter for cement producers from a demand perspective as it nosedives owing to the monsoon season impacting construction activities.</li><li>In Q2FY23, the cement companies witnessed soft demand in Jul’22 and Aug’22 but saw demand reviving strongly in Sep’22, driven by higher retail as well as institutional demand.</li><li>Institutional demand was more robust led by increasing construction activity after the receding monsoon.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Traditionally Q2 is a soft quarter for cement producers from a demand perspective as it nosedives owing to the monsoon season impacting construction activities.In Q2FY23, the cement companies witnessed soft demand in Jul’22 and Aug’22 but saw demand reviving strongly in Sep’22, driven by higher retail as well as institutional demand.Institutional demand was more robust led by increasing construction activity after the receding monsoon.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement Q2fy23 Preview - Recovery on Cards Despite a Weak Quarter

Equity Bottom-Up

<ul><li>Capital Infusion by Promoter : ACL (Ambuja Cements Limited) in its meeting held on 16th Sept, 2022 has decided to bring capital through equity infusion by issuing warrants (477.48 Mn) of Rs 2 each at a price of Rs 418.87/share totaling Rs 20000 Cr to Harmonia Trade &amp; Investment, a promoter group entity.</li><li>This will entail an equity dilution of 24.05%. With the converion of warrants into equity the promoters equity stake in the company will rise to 70.36% from the current 63.23% thereby increasing promoters stake in the company by 7.13%.</li><li>The warrants will be converted within 18 months from the date of the issue in one or more tranches.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Capital Infusion by Promoter : ACL (Ambuja Cements Limited) in its meeting held on 16th Sept, 2022 has decided to bring capital through equity infusion by issuing warrants (477.48 Mn) of Rs 2 each at a price of Rs 418.87/share totaling Rs 20000 Cr to Harmonia Trade &amp; Investment, a promoter group entity.This will entail an equity dilution of 24.05%. With the converion of warrants into equity the promoters equity stake in the company will rise to 70.36% from the current 63.23% thereby increasing promoters stake in the company by 7.13%.The warrants will be converted within 18 months from the date of the issue in one or more tranches.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ambuja Cements Limited - Capital Infusion, A Catalyst For Future Growth.

<div><div><div><ul><li>High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.</li><li>Mixed realisation gains QoQ: While energy cost continues to rise QoQ, the industry could not fully pass on the inflation across all regions.</li><li>Cost inflation elevated: We estimate that overall fuel costs would soar 7/42% QoQ/YoY amid rising imported coal and pet coke prices.</li></ul><ul style="list-style-type: none;"><li> </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p></div></div></div>

High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.Mixed realisation gains QoQ: While energy cost continues to rise QoQ, the industry could not fully pass on the inflation across all regions.Cost inflation elevated: We estimate that overall fuel costs would soar 7/42% QoQ/YoY amid rising imported coal and pet coke prices. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cement - Cost Inflation Continues, Margin Contracts

India

Ambuja Cements Limited manufactures cement in India. The Company owns specially designed ships and terminals for bulk transportation of its products. Ambuja Cement sells most of its products domestically, but also has a subsidiary that markets the Group's items in Sri Lanka.

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Ambuja Cements (ACEM IN)

Adani Enterprises - A Record Follow-On Public Offering May Be in the Works

ADANI ENTERPRISES has a board meeting Friday to discuss/approve a capital raise. The stock is up 25x+ in 3yrs and trades at 20x book and 300x PER...

Travis Lundy

Cement (Q2FY23 Results Preview): Healthy offtake; costs to peak out in Q2

Healthy volumes; mixed pricing trend across regions: We estimate our coverage universe of 15 companies to deliver 8% YoY volume growth (three-year...

HDFC Securities

Cement Q2fy23 Preview - Recovery on Cards Despite a Weak Quarter

Traditionally Q2 is a soft quarter for cement producers from a demand perspective as it nosedives owing to the monsoon season impacting...

Axis Direct

Ambuja Cements Limited - Capital Infusion, A Catalyst For Future Growth.

This will entail an equity dilution of 24.05%. With the converion of warrants into equity the promoters equity stake in the company will rise to...

Axis Direct

Cement - Cost Inflation Continues, Margin Contracts

High volume growth on a low base YoY: We estimate that 15 companies under coverage would report ~7% QoQ aggregate seasonal sales volume decline.

HDFC Securities

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