Ambuja Cements shares gain on dividend bounty
Shares of Ambuja Cements, now a part of Adani Group, were in focus on Wednesday after the cement manufacturer released its March quarter earnings report, which came in line with market expectations. Investors cheered the company’s decision to declare a dividend of ₹2.50 per share of face value of ₹2 each (125%) fully paid up for the financial year 2022-23. Last year, the company gave ₹7.3 for the full year, while it declared 41 dividends since its listing in 1999.
Ambuja Cements shares opened flat at ₹394 and gained as much as 1.5% to hit a high of ₹400.35 in the first two hours of trade so far. The stock has risen nearly 7% in six of the last seven sessions.
With a market capitalisation of ₹78,830 crore, the cement heavyweight trades 33% lower than its 52-weeek high of ₹598.15 touched on December 9, 2022, while it rebounded 27% against its 52-week low of 315.30 hit on February 2, 2023. In the last one year, the largecap stock has gained 8%, while it lost 26% in the past six months. In the calendar year 2023, the counter shed more than 24%, whereas it rose over 6% in a month.
In a post market-hour filing on Tuesday, Ambuja Cements, a part of Adani Cement, released its March quarter earnings, which saw its consolidated profit dropping by 10.86% to ₹763 crore in Q4 FY23 as compared to ₹856 crore in the same period last year. Sequentially, the profit grew 56% from ₹488 crore in December quarter of 2022.
The consolidated net revenue of the Adani group company increased marginally to ₹7,966 crore from ₹7,900 in Q4FY22 and ₹7,907 in Q3FY23. “The growth in revenue is despite the adverse impact on volumes from halting of the operations at the Himachal Pradesh plants for 50 days,” the company said in its earnings report. The company resumed operations at the Gagal and Darlaghat plants in Himachal Pradesh on February 21, which were closed in December last year due to rise in transportation costs.
On the operating front, EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) stood flat at ₹1,523 crore compared with 1,515 crore in the corresponding period last year. On the quarter-on-quarter (QoQ), the EBITDA rose nearly 34% from ₹1,138 crore in Q3FY23. The margins were at 19.1% as compared to 19.2% in the March quarter of 2022 and 14.4% in the December quarter of 2022.
The cost was reduced by ₹228 PMT QoQ and is expected to further reduce on cost optimisation and leveraging synergies from adjacency businesses of the group, Ambuja Cements said.
For the full financial year 2023, the Adani Group company’s net profit stood at ₹ 3,024 crore, while net revenue was at ₹38,937 crore. The figure is for fifteen months and not comparable with previous year as the company changed its financial year end from December to March.
Ajay Kapur, Whole Time Director & CEO, Ambuja Cements said, “We are pleased to report another strong performance of Ambuja Cement which has been driven by our strategic initiatives on business excellence, operational efficiencies and synergies. Our focus on operational excellence and cost optimisation measures has yielded improved profitability.”
“We continue to reduce our carbon footprint by lowering the clinker factor, reducing thermal and electrical energy intensity, implementing Waste Heat Recovery Systems at our plants and increasing our use of and capacity of generating renewable energy,” he added.