Ambuja Cements Share Price Extends Gains As Q2 Profit Beats Estimates

Ambuja Cements Ltd.'s share price increased on Monday due to its second-quarter profit surpassing analysts' estimates in a challenging pricing environment.

The company posted a profit of Rs 500.66 crore in the quarter ended Sept. 30, 2024, according to an exchange filing. Analysts tracked by Bloomberg had a consensus estimate of Rs 458.5 crore.

The Adani Group-owned cement manufacturer's standalone net profit fell 22.23% on a year-on-year basis in the second quarter of the current financial year. The fall in profits was on the back of a weak cement pricing environment pan-India, as well as factors like heavy monsoons, labour shortages, and slowdowns in construction activities impacting demand.

Meanwhile, the cement maker's revenue grew despite a weak cement pricing environment in India. The company's revenue was up 6.13% at Rs 4,213.24 crore, beating the Bloomberg estimate of Rs 3,923.5 crore.

Ambuja Cements said that while its Ebitda was impacted by 71% annual rise in 'purchase of stock in trade', power and fuel costs were down 17% year-on-year and freight expenses fell 2% on annual basis.

Shares of the company rose as much as 5.35% to Rs 582.25 apiece, the highest level since Oct. 22. The stock pared gains to trade 3.9% higher at Rs 574.45 apiece as of 1:45 p.m. This compares to a 1% advance in the NSE Nifty 50 index.

The stock has risen 10.37% on a year-to-date basis and 35.48% in the last 12 months. Total traded volume so far in the day stood at 1.16 times its 30-day average. The relative strength index was at 42.66.

Out of the 41 analysts tracking the company, 22 maintain a 'buy' rating, 11 recommend a 'hold,' and eight suggest a 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 39%.