Motorbike rides past Ambuja Cements India Ltd. billboard in Nashik, India (Photographer: Dhiraj Singh/Bloomberg)

Q2 Results: Ambuja Cements Profit Rises 27% Aided By Dividend From ACC

Ambuja Cements Ltd.’s profit surpassed estimates in the quarter ended June driven by a one-time gain.

Net profit rose 27.3 percent year-on-year to Rs 499.3 crore, said the cement maker in a stock exchange filing today. The profit was boosted by a Rs 141-crore dividend from ACC Ltd. Ambuja Cements and ACC had announced a merger in May 2017, before putting the proposal on hold in February citing “certain constraints”. The consensus estimate of analysts tracked by Bloomberg stood at Rs 333.4 crore.

Revenue rose 5.7 percent from last year to Rs 3,016.9 crore, surpassing the Rs 2,940.6-crore consensus estimate. Volumes rose 5.3 percent to 6.37 million tonnes, in line with estimates.

On the operational front, Ambuja Cements’ earnings before interest, tax, depreciation, and amortisation fell 4.4 percent to Rs 622 crore, while its margin contracted to 20.6 percent, as input cost pressures weighed.

  • Power and fuel cost as a percentage of net sales rose to 22 percent from 20 percent.
  • Freight and forwarding expenses as percent of sales rose to 29 percent from 26 percent earlier.
  • Employee cost was contained at 5.9 percent of net sales

Other Highlights

  • Realisation/tonne rose 0.4 percent to Rs 4,736 due to better pricing in key markets.
  • EBITDA/tonne fell 9.2 percent on a yearly basis but rose 19.8 percent sequentially to Rs 977.
  • Finance cost as a percent of profit before tax fell to 2.8 percent as compared to 3.1 percent.

Going forward, the company expects to gain from the government’s focus on the rural economy, infrastructure growth, and affordable housing push, even as it flagged off input cost pressures.

While Ambuja Cements is well placed to benefit from the government initiatives, increase in fuel prices and input material costs is likely to continue in the near term.
Ambuja Cements’ Exchange Filing

Shares of Ambuja Cements erased gains and fell as much as 1.9 percent to Rs 208 before the results were announced. The stock fell 11 percent between April to June.

Also read: NCLAT Upholds Rs 6,300-Crore CCI Fine On Cement Companies

Corrects earlier version to update Ebitda change.