Ultratech Cement - Acquires 4.8mt Gujarat plant at USD124/ton - Motilal Oswal

EPS upgrade of ~3%; benefits of consolidation can be meaningful

- Ultratech Cement (UTCEM) has approved acquisition of Jaypee's 4.8mt of Gujarat asset at EV of INR38b (USD124/ton).

- The transaction offers UTCEM with good quality asset, along with the scope of doubling capacity and location advantage, being a coast-based plant.

- We expect value accretion from next two to three years led by of several synergistic benefits and market consolidation.

- FY15E/16E PBT may be dented by 5.7%/3.2% due to an increase in net debt, while EPS may witness an upgrade of 2-3%, due to tax savings on carry forward losses.

Source : Equity Bulls

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