Ambuja Cements Q1 Results: Topline misses estimates, operational performance improves

Ambuja Cements Ltd., announced its results for the June quarter on Tuesday, July 28, with net profit decreasing 36.6% year-on-year to ₹660 crore. The company had reported a net profit of ₹1,041 crore during the same quarter last year.

The cement major has reported a 7.7% decline in its revenue for the June quarter to ₹9,500 crore from ₹10,289 crore during the same quarter last year. A CNBC-TV18 poll had pegged the figure to be ₹10,200 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) declined by 19% from last year to ₹1,589 crore from ₹1,962 crore last year, while margins narrowed to 16.7% from 19.07% in the year-ago period.

A CNBC-TV18 poll had pegged the EBITDA figure to be ₹1,559 crore and margins to be at 15.2%.

Volumes for the quarter declined by 14% on a sequential basis and 7% from the same quarter last year to 17.1 MT. A higher than expected decline in volumes is behind the sluggish topline figure during the quarter.

The company's EBITDA per tonne for the quarter declined by 13% from last year to ₹931 crore. However, the figure was up 27% from the March quarter.

Earlier this month, on July 2, brokerage firm Bernstein upgraded Ambuja Cements to "Outperform" from its earlier rating of "Market Perform". Bernstein cited the valuation gap between India's two largest cement producers (Ultratech) has become unsustainable.

In its post-earnings release, the management of Ambuja Cements said that cement demand is expected to remain soft at around 5% for the full financial year, adding that the impact of peak fuel cost inflation will likely coincide with a seasonally weaker second quarter.

Shares of Ambuja Cements are trading 0.8% lower after the results announcement at ₹427.55. The stock is down 23% so far this year.