Ambuja Cements net profit up 19 per cent on better realisation

Our Bureau Mumbai | Updated on July 25, 2019

Ambuja Cements, a part of Lafarge-Holcim group, has reported that its net profit in the June-quarter was up 19 per cent at ₹623 crore (₹525 crore) largely due to higher realisation and lower raw material cost.

The company’s net sales was up 8 per cent at ₹6,925 crore (₹6,683 crore). Its sales volume was down 4 per cent at 13.02 million tonne (13.61 mt).

Ebitda increased 15 per cent to ₹1,484 crore (₹1,294 crore). While the cost of fuel increased, it was partly offset by the lower cost of raw materials and supply chain efficiencies.

Future looks good

The company said that the re-election of a stable government at the centre is expected to provide policy continuum and growth momentum. “Recent actions such as lower interest rates, reforms in IBC and slew of measures announced for the financial sector to ease the liquidity, augur well for the economy,” said the company in a statement on Thursday.

“The government's current budgetary allocation in infrastructure development, construction of concrete roads, interlinking of rivers, irrigation projects and affordable housing is expected to have a favourable impact on cement demand,” it added.

‘Strong performance’

Bimlendra Jha, Managing Director and CEO, Ambuja Cements, said that the company has delivered a strong financial performance in the quarter, backed by higher realisations and accelerated cost saving measures.

“Despite higher fuel costs, the company did well by optimising logistics costs, reducing raw material and fixed costs. Cement demand growth was muted in the quarter,” he said.

“Focus on increasing premium product portfolio, targeting bigger markets combined with logistics efficiencies resulted in achieving a strong performance,” he said.

On a standalone basis, the net profit was up 15 per cent at ₹412 crore (₹358 crore) while sales were down marginally at ₹2,912 crore (₹2,927 crore). The company had received a dividend of ₹132 crore as dividend in March quarter from its subsidiary ACC.

Shares of Ambuja Cement was down 0.39 per cent at ₹215 on Thursday.

Published on July 25, 2019

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