Ambuja Cement Q1 results: Net profit jumps 71% to Rs 947 crore, beats analyst estimates

“India demand growth has been strong in the last quarter which has also helped the sales volume growth and commercial performance,” said Neeraj Akhoury, managing director of

Ltd, in a statement on Thursday.

Despite strong and continuing headwinds on input prices including coal, pet coke and diesel, Ambuja has made significant progress on efficiency improvement that has had a positive impact on cost evolution, said Akhoury

The company follows January to December as its financial year.

The company standalone net profit is at Rs 665 crore, up 67% year on year. Ambuja’s earnings before interest, taxes, depreciation and amortization during the quarter is higher by 47% as against the previous year at Rs 860 crore and EBITDA margin for the quarter expanded by 330 basis points vs previous year

The company’s consolidated net sales during the quarter increased to Rs 4,213 Crore compared to Rs 3,433 Crore last year, resulting in a growth of 23%. Special products volume grew at 82% compared to the same period last year.

“We believe that these numbers should drive 8-10% Ebitda upgrade even after considering higher energy/freight costs going ahead,” said Sanjeev Singh, Research analyst at Systematix commodity services.

Ambuja’s Total operating cost per tonne declined by more than 5% led by operational efficiency programs in the plants along with logistics efficiencies such as direct dispatches, reduction in lead and increased home market sales, the company said in a statement.

“These initiatives have compensated for the impact of rising fuel and raw material costs, which continues to be a matter of attention for the coming quarters,” it said.

Ambuja’s consolidated revenue from operations grew by 23% at Rs 7,714 crore as against Rs 6,249 crore in the same period last year.

“Ambuja Cements reported stellar performance mainly led by cost reduction measures. It has positively surprised with a sharp improvement in operating efficiencies. Clearly, initiatives undertaken by the company to improve efficiencies started paying off,” said Binod Modi, Head Strategy at Reliance Securities.

We believe such operating efficiencies can help it to get re-rated in due course, Modi added.

The company’s Greenfield expansion project at Marwar Mundwa is planned to commence operations in Quarter 3, 2021. Our ambitious growth plans to increase capacities in India are progressing well, Akhoury said.

“Our upcoming facility in Marwar Mundwa, Rajasthan will enhance clinker capacity by 3 MTPA and help improve cement sales by 5 MTPA. We are progressing on our ambition to reach 50 million tons in the mid-term,” he added.

Though the second wave of pandemic warrants caution, the increased vaccination drive combined with the various stimulus proposals provided in the Union Budget 2021 and accommodative monetary and fiscal policies are expected to support economic recovery in the medium term, the company’s statement said.

“Rural demand is likely to remain resilient on a good projection for the agriculture sector. We would like to remain cautiously optimistic for the year,” the statement said.