Ambuja Cements Q2 profit falls 42% to ₹456 crore

Consolidated net profit of Adani Group-owned Ambuja Cements fell 42.5% year-on-year to ₹456 crore for the quarter ended September compared with ₹793 crore in the corresponding period last fiscal.

The company’s revenue rose marginally by 1.2% year-on-year to ₹7,516 crore for the second quarter compared with ₹7,423 crore in the year-ago period, driven by higher trade sales volume and premium products.

The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at ₹1,111 crore, down 15% year-on-year, with an EBITDA margin of 14.8%. Volumes grew 9% year-on-year to 14.2 million tonnes.

Strong infrastructure demand and ongoing needs from the housing and commercial sectors are anticipated to boost cement demand in the second half of FY25, the company says. Ambuja Cements expects demand during FY25 to grow in the range of 4-5%.

“The introduction of PMAY Urban Housing 2.0, with an allocation of ₹11 lakh crore, along with Government’s continued focus on infrastructure development as the key to economic growth augurs well for cement sector. Strategic investments in roads, railways along with urban and commercial amenities, is poised to drive robust growth,” it says.

Reacting to the development, shares of Ambuja Cements rose 5% to hit a high of ₹582.20 on the BSE.

Capex initiatives across all operational areas such as volumes, efficiencies and cost coupled with Group synergies have shown healthy improvements reinforcing Ambuja’s cost leadership, the cement producer says.

The increased use of low-cost imported petcoke and e-auction coal along with overall reduction in cost of fuel basket have contributed to 13% reduction in Kiln fuel cost, it says.

“With our strong foothold across the nation, we are further expanding our footprint in new geographies in-line with our vision. Post successful completion of the Orient Cement transaction, we are well poised to achieve 100+ MTPA capacity by this fiscal year end,” says Ajay Kapur, whole-time director and CEO of Ambuja Cements.

This performance is supported by healthy volume growth, increasing scale of operations, value extraction of acquired assets, enhanced cost leadership, improved operational efficiencies and group synergies, the cement maker says in a regulatory filing.

The debt-free company’s cash and cash equivalent stood at ₹10,135 crore.

Ambuja Cements, with its subsidiaries has taken the Adani Group’s cement capacity to 89 MTPA with 22 integrated cement manufacturing plants and 21 cement grinding units across the country.

Ambuja had announced the signing of a binding agreement with Orient Cements for acquisition of 46.8% shares, at an equity value of ₹8,100 crore. With the accelerated organic and inorganic growth, the company says it is well poised to achieve over 100 MTPA capacity by March 2025.