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Nirmal Bang Report
Ambuja Cements Ltd. reported extremely good set of results for Q1 CY22, with Ebitda of Rs 7.9 billion, 22% ahead of our estimate, largely driven by lower-than-expected costs.
The company reported ~Rs 200/million tonne decline in power and fuel costs compared to our expectation of an increase. We believe that -
higher usage of domestic/captive coal,
increased petcoke usage and
lower clinker factor would have helped the company to achieve lower-than expected fuel costs.
Overall, operating costs declined by Rs 238/million tonne, driven by lower other expenses and power and fuel costs.
‘I Can’ initiatives of Ambuja Cements, coupled with the master supply agreement with ACC Ltd. benefits also helped contain overall costs.
As a result, Ebitda/million tonne came in at Rs 1,055 against our expectation of Rs 879.
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