Ambuja Cements shares gain on plan to invest Rs 6,000 crore in renewables

The Ambuja Cements stock opened with gains on December 19 after the Adani Group company announced an investment of Rs 6,000 crore ($723 million) to build 1,000 megawatt of renewable power projects in keeping with the conglomerate’s net zero goal.

The cement maker will fund the investment through internal accruals, the company told exchanges.

Ambuja Cements is targeting using green energy for 60 percent of its 140 million ton planned capacity a year, up from the current 19 percent, it added.

At 9:32 am, Ambuja Cements shares were trading marginally higher at Rs 526.05 on the National Stock Exchange (NSE).

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The investment encompasses a portfolio mix of solar and wind power projects in Gujarat and Rajasthan, which will reduce the cost of green energy generation by 20 percent from Rs 6.46 a kilowatt-hour to Rs 5.16 and increase the supply of green cement.

“The lineup includes a 600-MW solar power project and 150-MW wind power project in Gujarat and a 250-MW solar power project in Rajasthan. This will be achieved by FY 2026 (200 MW by March 2024) in addition to the existing 84 MW of solar and wind power,” the company said.

Ambuja Cements’ investment also promises economic advantages to the company’s planned larger capacity of 140 MPTA. “With lower cost of generation from green power, the power cost will come down from Rs 6.46 per kWh to Rs 5.16 per kWh.

A reduction of Rs 1.30 per kWh (20%), which translates into Rs 90 PMT of cement for targeted capacity of 140 MTPA by FY 2028, accelerating the company’s ESG targets,” it said.

Also Read | Adani Group’s Ambuja Cements to invest $723 million in Green Energy projects

On December 18, Ambuja Cements closed half a percent higher at Rs 525.90 on the National Stock Exchange. The stock has rallied more than 25 percent in the past month.

However, on a year-to-date basis, the stock is marginally in the red, underperforming the benchmark Nifty, which has delivered a return of around 17 percent during the period.

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