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Ambuja Cements Delivers Lifetime Highest Annualised PAT

| Updated: May 1, 2024 18:19

Gautam Adani-owned Ambuja Cements recorded a 64 per cent surge in the March quarter consolidated net profit to Rs 1,055 crore (attributable to owners of the company) from Rs 645 crore last year, helped by softened input costs.

The company has also delivered the lifetime highest annualised PAT of Rs 4,738 crore, up 119% year-on-year.

The company’s revenue from operations rose 12 per cent to Rs 8,894 crore. On a sequential basis, revenue rose 9.4 per cent from Rs 8,128.80 crore while profit surged 28 percent from Rs 823.05 crore reported in Q3FY24.

On standalone basis, the cement maker’s profit rose 6 per cent to Rs 532 crore from Rs 502 crore in the same quarter last fiscal.

The company also said that its board has recommended a dividend of Rs 2 per share.

On April 30, Ambuja Cements’ shares closed trading 1.7 per cent lower at Rs 618.95 a piece.

“The cement industry’s outlook remains positive driven by pre-election spending, ongoing government emphasis on infrastructure development, and sustained real estate activity,” the company said.

Cement prices across India suffered a significant drop in the second half of the fiscal year due to escalating competition and an increase in supply. Prices fell by Rs 40-45 per bag over the five months from November 2023 to March 2024, following a price increase in October 2023, according to a recent market report by analytics firm CRISIL.

While the sector saw healthy volume growth owing to aggressive capacity expansion plans from the top players of the industry, several factors such as increasing temperatures, the ongoing general elections, labor shortages, liquidity problems, and challenges related to the availability of sand and water in certain regions led to weak demand.

“We remain steadfast in delivering long-term value and sustainable growth as we soar towards doubling capacities, investment in efficiency improvement, green power, assured supplies of raw-material and fuel. Last week, ACC Ltd, another Adani firm, reported consolidated net profit of Rs 945 crore in the quarter ending March 31, 2024, up 300 percent,” said Ajay Kapur, Whole Time Director & CEO, Ambuja Cements.

Cement volume growth recovered to a healthy 7-8 percent on-year in the last quarter of fiscal 2024, on aggressive volume push, after growing ~15 percent on-year in the first half and logging a moderate slowdown in the third quarter due to regional hindrances, markets analytics firm Crisil said in its sector report on April 23.

In April, the Adani family, the promoters of Ambuja Cements, infused an additional Rs 8,339 crore into the cements company under the warrants program, increasing its stake in the company to 70.3 percent and total investment to Rs 20,000 crore.

The company said the fund infusion will be important in achieving the capacity of 140 million tonnes per annum by 2028 by the cement vertical.

Cement capacity increased by 11.4 millions of tonnes per annum (MTPA)taking total capacity to 78.9 MTPA, the company said adding that 4 MTPA clinkering & 4.8 MTPA cement capacity is targeted to commence in Q4 FY ‘25.

Meanwhile, its rival, UltraTech cement has earmarked investments worth Rs 32,000 crore as its capacity of 200 million tonnes per annum in the near future. As of March 31 2024, UltraTech’s grey cement capacity of the company amounted ot 140.8 millions of tonnes per annum (MTPA) in India. The company expects the capacity to be 157.0 MTPA by FY25.

Consolidated revenue from operations fell about 15 per cent to Rs 33,159.64. Ambuja pointed out that the calculations for the previous financial year is for a period of fifteen months i.e., January 01. 2022, to March 31. 2023.

Net profit (attributable to owners) rose 38.5 per cent to Rs 3,576.79 crore in FY24.

For FY24, the cement maker recorded sales volume (Cement and Clinker) of 59.2 million tonnes up from 54.7 million tonnes recorded in FY23.

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