Ambuja Cement reported that its consolidated net profit in the December quarter was up 13 per cent at ₹489 crore against ₹431 crore in the year-ago period on the back of tax write-back.

Revenue from operations increased four per cent to ₹7,907 crore (₹7,625 crore). Production volumes were down four per cent at 13.7 mt (14.2 mt).

EBITDA was down at ₹1,138 crore (₹1,213 crore), while EBITDA margin fell to 14.6 per cent (16.2 per cent).

The company reversed the tax provision of ₹149 crore and interest of ₹31 crore on reassessment of the tax liability.

Higher power and fuel cost at ₹2,341 crore (₹2,068 crore) pushed up overall expenses by six per cent to ₹7,279 crore (₹6,866 crore).

Direct sales improved from 44 per cent to 50 per cent and lead distance was reduced from 263 km to 248 km while dispatches through rail was also increased. These measures are expected to further reduce logistics cost.

Cost optimisation

As part of cost optimisation, the company has partially commissioned Waste Heat Recovery projects at Bhatapara, Rauri, Suli and will achieve full capacity of 39 MW in the March quarter. While a 14 MW WHRS was fully commissioned at Marwar, the 28 MW project at Ambujanagar and Maratha are under implementation, the company said.

Ajay Kapur, CEO, Ambuja Cements, said the cement sector during the quarter saw higher production and capacity utilisation on account of pickup in demand.

EBITDA margins expanded due to focus on reduction in fuel and logistics costs by leveraging synergies with group companies, he said.

Business initiatives are expected to further bring down operating cost, reduce clinker factors, reduce logistics cost, improve sales of blended cement and expand EBITDA margin, he added. 

“We expect cement demand to further grow in coming quarters on the back of increased infrastructure activities given the sharp focus on infrastructure capex in this Budget,” he said.

The focus on capacity ramp up in an efficient way to become the lowest cost producer is on track, said Kapur.

Ametha integrated unit is set to be commissioned by July and it will increase kiln capacity by 3.3 mtpa (EC approvals in hand for 2.75 mtpa) and 1 mtpa grinding unit.