Ambuja Cements on Wednesday reported its third quarter profit for the financial year 2023-24 at Rs 823.05 crore, up 89.5 per cent in comparison to Rs 823.05 crore during the corresponding quarter of previous year, beating estimates. It posted revenue from operations at Rs 8128.80 crore, up 2.8 per cent as against Rs 7906.74 crore during the third quarter of FY23. According to a CNBC VT18 poll, Ambuja Cements was expected to record Q3 profit at Rs 703 crore and revenue for the quarter in review was estimated at Rs 4399 crore.
Ajay Kapur, Whole Time Director & CEO, Ambuja Cements Limited, said, “Our performance is a reflection of our resilience and focused efforts. Our pursuit of excellence continues to propel us towards setting new benchmarks in our steady growth. We remain steadfast in our mission to deliver value for all stakeholders by redefining the industry landscape.”
The business, Ambuja Cements said, has seen notable progress in every financial matrix. “EBITDA, EBITDA PMT and EBITDA margins have grown higher than revenue growth given sharp improvement in operating costs. EBITDA margin at 21.3 per cent for Q3FY24 is the highest in the last 10 quarters. A total of Rs 562 crore incremental Cash & Cash Equivalent was generated in Q3FY24. With this, the Cash & Cash Equivalent stands at Rs 8591 crore after factoring the outflows related to the acquisition of Sanghi, Asian Cements, as well as ICDs provided to Sanghi. This is highest amongst peer group and in the industry,” the company said in a statement.
Ambuja Cements, in December 2023, completed the acquisition of Sanghi Industries having 6.1 MTPA capacity. This month, Ambuja’s subsidiary ACC completed the acquisition of the balance 55 per cent stake in Asian Concretes and Cements Private Ltd (ACCPL) having 2.8 MTPA capacity. These acquisitions, it said, reinforce the Adani Group’s market leadership and take its cement capacity to 77.4 MTPA, which is a jump of 15 per cent from last year.
There is an ongoing cement capacity expansion of 20 MTPA at various stages. The company board has also approved additional cement capacity expansion of 12 MTPA, which outlines a road map for 110 MTPA (80 per cent of 140 MTPA capacity targeted by FY 2028).
Future Outlook
The cement industry is expected to have a demand growth between 7 per cent and 8 per cent because of investments in infrastructure and real estate projects. India’s per capita consumption of 272 Kg as compared to the global average of ~ 550 kg provides a sizeable potential for expansion of the cement industry. “Ambuja has lined up massive investments in green power (WHRS, Solar, Wind), AFR handling, railway infrastructure and fly ash handling systems amongst others. These are expected to result in sizeable improvement in profitability/EBITDA and returns to stakeholders. Higher consumption of domestic coal helped in improving coal cost and the trend is expected to continue. The opportunity to buy low cost petcoke in the past few weeks will help to further,” said the company.
Furthermore, the company also informed that Navin Malhotra has been elevated as Chief Sales & Marketing Officer and SMP of the Company w.e.f. 31st January 2024. Also, Diwakar Payal has assumed a new role of ‘Adviser to CEO office’ and ceased to act as Chief Sales and Marketing Officer and SMP, Ambuja Cements said in a regulatory filing.