Ambuja Cements Q3 Results Review - Reclaiming Market Share With 140 mtpa Target: Yes Securities

Yes Securities Report

Ambuja Cements Ltd.'s reported a healthy performance, where revenue grew by 8% Y/Y aided by +7% Y/Y volume growth and 1% Y/Y net sales realisation growth in Q3 FY24. Raw material cost/tonne surged by 42% YoY due to higher clinker transfer because of maintenance shutdown during the quarter.

Despite that, the total cost/tonne decline by 4% YoY aided by eased power cost/tonne by 34% YoY translates in Ebitda of Rs 1038/tonne (plus 28% YoY).

Ebitda/profit after tax grew by 36/19% Y/Y to Rs 8.5/5.1 billion in Q3 FY24. Under new management, Ambuja Cements targets to reach 140 million tonnes per annum by FY28E to regain the lost market share. In this endeavor, Ambuja Cements is adding 19.6 mtpa of cement capacity with 10.25 mtpa clinker.

Moreover, with the Sanghi Industries Ltd./Asian Concretes and Cements Private Ltd.'s acquisition, the console capacity to reach 110 mtpa by FY28E.

As a result, the incremental volume from newly commissioned capacities will start from FY26E onwards, while standalone volume should grow at ~10% compound annual growth rate over FY24-26E supported by master supply agreement with subsidiaries.

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