Ambuja Cements Q2 Results: Profit Beats Estimates Despite Weak Pricing Environment
Ambuja Cement's standalone revenue rose 6.13% year-on-year to Rs 4,213.24 crore, beating Bloomberg estimate of Rs 3,923.5 crore.
Ambuja Cements Ltd. posted a profit of Rs 500.66 crore in the quarter ended Sept. 30, 2024, according to an exchange filing on Monday. 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, labor shortages and slowdown in construction activities impacting demand.
Ambuja Cements Q2 FY25 Highlights (Standalone, YoY)
Revenue up 6.13% to Rs 4,213.24 crore (Bloomberg estimate: Rs 3,923.5 crore).
Ebitda down 12.02% to Rs 680.52 crore (Bloomberg estimate: Rs 522.86 crore).
Ebitda margin narrowed to 16.15% vs 19.48% (Bloomberg estimate: 13.3%).
Net profit down 22.23% to Rs 500.66 crore (Bloomberg estimate: Rs 458.5 crore).
Ambuja Cement's revenues saw a 6% year-on-year uptick despite the weak pricing environment. Growth was mainly supported by a 9% annual pick up in volumes to 14.2 million tonne, the highest ever achieves in a Q2 series in five years. The company's total volumes for H1FY25 stood at 30.1 million tonne.
Ebitda was mainly impacted by a 71% annual rise in 'purchase of stock in trade. While margin narrowed to 16.15%, they stood 285 basis points above the Bloomberg consensus estimate of 13.3%. Margins was also supported by the 17% and 2% fall in power & fuel, and freight expenses, respectively.
Capacity
As of September 2024, consolidated capacity of Ambuja Cements stood at 89 million tonne per annum. This capacity will grow to 91 million tonne per annum after the acquisition of Orient Cements. The company also has various projects under advance stages of execution, which includes cement capacity of 21 MTPA and clinker capacity of 11 MTPA.
The company now has 22 integrated units, 10 bulk cement terminals and 21 grinding units. The company's has the highest consolidated capacity share in the western region at 25%, and 24% share in the northern and southern zone each.
Future Outlook
Ambuja Cements expects strong infrastructure demand and ongoing needs from the housing and commercial sectors to boost overall cement demand in second half of fiscal 2025.
The company expects India's cement demand during to grow 4-5% in fiscal 2025.
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