Ambuja Cement's Q1 profit up 31.2% YoY to ₹1,135 cr

Adani Group-owned Ambuja Cement released the financial results for April to June quarter of FY24 on August 2. During the quarter under review, the company's consolidated profit after tax stood at ₹1,135 crore, up 31.2% year-on-year (YoY) as against ₹865 crore in the same period of the previous year. The revenue from operations of the cement major increased by 8.4% year-on-year to ₹8,713 crore in the June quarter as against ₹8,033 crore in the same period last year.

On a sequential basis, the company's profit after tax surged by 48.7% quarter-on-quarter as against ₹763 crore in the January to March period of FY23. The company's revenue from operations, sequentially, grew by 9.37% as against ₹7,966 crore in the Q4 of FY23. 

The company's EBITDA (earnings before interest, tax, depreciation and amortisation) stood at ₹1,930 crore, witnessing a growth of 54.6% year-on-year, as against ₹1,248 crore in the same period last year. The EBIT margin expanded by 6% to 22.2% in the quarter under review, as against 15.5% in the same period last year. The company's sales volumes stood at 15.4 million tonnes as against 14.1 million tonnes in the June quarter of FY23.

"Along with the strong demand for our premium cement products, growth was fueled by our various competencies in operational excellence, supply chain management, and sales & marketing excellence. Our synergies with the Adani Group companies are lowering input costs, which is boosting EBITDA growth. Furthermore, our blueprint of improvements through Group synergies and CAPEX for efficiency and decarbonization whilst creating opportunities, will redefine the cement industry landscape," says Ajay Kapur, whole-time director & CEO, Ambuja Cement.

Following the development, shares of Ambuja Cements, however, declined by 2.5% to hit an intraday low of ₹449.70 apiece on the BSE. The scrip opened lower at ₹460.65, down by 0.2% as against the closing price of the previous session of ₹461.60. During the session, the company’s market capitalisation stood at ₹91,776.52 crore with more than 3.12 lakh shares exchanging hands as against the two-week average of 2.24 lakh shares.

In its outlook, Amubja Cement says, "The foundation for long-term economic growth remains strong, supported by several key factors. One of these factors is the burgeoning middle class, which is expanding rapidly and driving consumer spending. India's domestic consumer market is experiencing rapid growth, while the country's industrial sector is also substantial, making it an attractive investment destination for multinational companies across various sectors such as manufacturing, infrastructure and services. Additionally, India's status as the start-up capital of the world is drawing significant foreign investments, fuelled by its young population and technological advancements."

According to the rating agency Moody's Investor Service, the country's cement production will climb by around 6%-8% over fiscal years 2023 and 2024, following a 21% jump for the fiscal year ended March 2022.

"A growing housing sector, which typically accounts for 60%-65% of India's cement consumption, will remain a key demand driver. Also, continued large investments in roads and infrastructure projects will fuel cement demand," Moody's says.