Ambuja Cements Q3 net profit jumps 13% on-year, misses estimates; revenue at Rs 8036 crore

Ambuja Cements Q3 consolidated net profit, revenue failed to beat street estimates despite rising 13% and 10% respectively for the quarter ended December 2022.

Ambuja Cement Q3 result, Ambuja Cement shares, Ambuja Cement share price
Ambuja Cement share price jumped more than 7% to hit an intraday high of Rs 406.85 on the BSE ahead of Q3 results. (Image: Reuters)

Ambuja Cements reported a 13.2% on-year jump in consolidated net profit to Rs 488 crore for the quarter ended 31 December 2022, missing estimates of 35% growth. The Adani group company’s consolidated revenue for the quarter came in at Rs 8,036 crore, up 10% on-year. Shares of Ambuja Cements opened 1.5% lower on Tuesday, but recovered soon and were trading 2.8% higher, ahead of its quarterly results. The scrip jumped more than 7% to hit an intraday high of Rs 406.85 on the BSE.

EBITDA for the quarter came in at Rs 1,138 crore, down 6.4% from Rs 1,213 crore reported in the same quarter last year. EBIT margin fell to 14.6% from 16.2% in the corresponding quarter a year ago. Analysts expected cement sector to show some signs of recovery in the December quarter compared to the weak performance in the September period. Kotak Institutional Equities projected the net profit of the cement manufacturer to jump of 37% on-year to Rs 344.8 crore, while revenue was seen at Rs 4,127.5, up 10.5% on-year.

Ambuja Cements maintains healthy top-line, leadership position in core markets

“During the quarter, the cement sector saw higher production & capacity utilisation on account of pickup in demand. The Company has maintained a healthy top line and leadership position in its core markets with a stronger Ambuja & ACC product portfolio. EBITDA margins expanded due to relentless focus on reduction in fuel and logistics costs by leveraging synergies with Group Companies,” said Ajay Kapur, CEO Ambuja Cements. He further stated that business initiatives are expected to further bring down operating cost, reduce clinker factor, reduce logistics cost, improve sales of blended cement and expand EBITDA margin. “We expect cement demand to further grow in coming quarters on the back of increased infrastructure activities given sharp focus on infrastructure capex in this Budget,” Kapur added.

Ambuja Cements’ fuel costs, warehouse infrastructure optimised

According to the regulatory filing, robust volume growth of 7% sequentially was seen, supported by an increase in blended cement, better route planning, and higher operational synergies with its subsidiary, ACC. The company noted that Kiln fuel cost reduced by 14% with a change in coal basket, group synergies on coal procurement. Fuel costs will be further optimised in future. Warehouse infrastructure was also optimised. Direct sales improved from 44% to 50%, lead distance reduced to 248 kms, higher dispatches through rail. “These measures are expected to further reduce logistics cost,” the company said.

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First published on: 07-02-2023 at 15:28 IST