Ambuja Cements net profits up 46% in Dec-22 quarter

Ambuja Cements, part of the Adani group, reported 46% higher standalone net profits at Rs369 crore for the December 2022 quarter. This is much better than the consensus analyst expectation. Revenues on a stand-alone basis were up 10.4% YoY at Rs4,129 crore. Interestingly, cement volumes recorded 7% volume growth at 7.70 million tonnes for the quarter. Pricing was also favourable for Ambuja cements during the quarter.

The pick-up in demand ensured that Ambuja Cements reported higher production and higher capacity utilisation. The EBITDA (operating profit) was up 10% on YoY basis at Rs626 crore for the December 2022 quarter. However, due to input cost pressures, the EBITDA margins fell marginally by 9 basis points to 15.16% for the December 2022 quarter. In the quarter, input costs were up 30% while power and fuel costs were up 7.5% YoY. 

On the positive side, the freight and forwarding expenses fell by 1% YoY. In the coming quarter, the company plans to further reduce the operating costs, reduce the clinker factor, cut down on logistics cost, improve the sales of blended cement. This is likely to have a salutary impact on the EBITDA margins. The surge in infrastructure activity by the government is also expected to give a boost to cement demand in the coming quarters.

For the quarter, the revenue and net profit numbers were ahead of analyst expectations. Even the EBTIDA margins are almost 165 basis points better than the analyst expectations. Ambuja Cements is expected to commission the Ametha Integrated Unit by July 2023, increasing kiln capacity by 3.3 MTPA. Like the other Adani group companies, Ambuja Cements has also seen pressure on the stock price due to the allegations made by Hindenburg Research.