In today’s briefing:
- The Beat Ideas: Adani Cements: Massive 140 MTPA Capacity Expansion, A Roadmap to FY28
- Bajaj Finance (BAF): Robust Growth in Place
- Central Banks Hold Steady Amid Global Economic Uncertainty
- NMDC: Proxy to Rising Steel Demand with a High Dividend Yield.
- EAAA India Pre-IPO – Quality Management Fee Stream but Future AUM Raising Could Be Difficult
The Beat Ideas: Adani Cements: Massive 140 MTPA Capacity Expansion, A Roadmap to FY28
- Ambuja Cements (ACEM IN), established in 1983 by traders Narotam Sekhsaria and Suresh Neotia, leveraged strategic foresight to become a premier Indian cement giant within the diversified Adani Group.
- In 2022, Adani acquired Ambuja Cement at INR 385/share, valuing it at INR 49,620 crore ($6.4 billion), at EBITDA/ton levels (INR900-INR1,000) similar to the company’s current performance.
- Ambuja Cement is strategically positioned to achieve a substantial 44% increase in its cement production capacity by FY28, reaching a total of 140 MTPA from the current 97 MTPA.
Bajaj Finance (BAF): Robust Growth in Place
- Bajaj Finance Ltd (“BAF”) reported a strong Q3FY25 led by good volume growth and AUM growth. It saw highest ever new loans at 12.06mm. AUM growth was INR 24119cr.
- Despite elevated credit costs for peers, BAF has been relatively insulated and reported steady asset quality. ROA and Opex were also steady at around 4.5% and 33%, respectively.
- In line with BAF’s long-range strategy, BAF is increasingly adopting AI to improve productivity. As part of this, BAF unveiled a BFL 3.0 FINAI company.
Central Banks Hold Steady Amid Global Economic Uncertainty
- Central banks globally are making rate decisions, with the Fed holding steady while Sweden, Switzerland, Taiwan, and the UK announce their decisions today.
- Mexico and Canada are central banks to watch, with Fitch forecasting both economies to enter recession in 2025 due to their high US trade exposure.
- The US’s global reciprocal tariffs, set to be revealed on April 2, have significant implications for the global economy, with the potential to influence central bank policies worldwide.
NMDC: Proxy to Rising Steel Demand with a High Dividend Yield.
- NMDC has aggressive growth plans to double its output over the next 5-6 years. Near-term guidance is also strong with plans to grow at >10% in FY26.
- New levies, delays in execution and lacklustre pricing outlook remain a key concern. However, well-aligned to surging demand from steadily growing domestic steel industry.
- Valuations: Trades at 9x TTM PE which is a slight premium to 5 yr average. Stock offers about 4-5% dividend yield and has payout ratio of >30% provides downside support.
EAAA India Pre-IPO – Quality Management Fee Stream but Future AUM Raising Could Be Difficult
- EAAA India Alternatives Ltd (1619210D IN) is planning to raise about US$177m through its upcoming India IPO.
- It is one of the leading alternatives platforms in India, with AUM of INR 572.62bn (US$6.63bn), as of 9M24, amassing 15 years of experience.
- In this note, we look at the firm’s past performance.
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