Ambuja Cement Q3: Stock plunge 5% as Bottom-line misses estimates!

Ambuja Cement

Consolidated profit decline - Ambuja Cements reported a decline of 55.48% in its consolidated profit, and it stood at Rs 430.97 crore for the Oct-Dec quarter. The company follows January to December as its financial year. In the year-ago period, it reported a consolidated profit of Rs 968.24 crore. The consolidated results include financials from its step-down firm ACC Ltd.

On a standalone basis, Ambuja Cements reported a decline of 49.37% in its net profit to Rs 251.66 crore as against Rs 497.10 crore in the year-ago period.

Revenue - The revenue from operation for the December quarter stood at Rs 7,625.28 crore, up 2.31% YoY. In Q4FY21, the company reported revenue of Rs 7452.87 crore.

The standalone revenue reported stood at Rs 3,735.12 crore, up 6.25% in the October-December 2021 quarter against Rs 3,515.11 crore a year ago.

Total expenses - The company reported total expenses at Rs 6,865.61 crore in the December quarter. The expenses increased by 6.7% from Rs 6,434.43 crore in the year-ago period.

Sales volume - The sales volume was flat at seven million tonnes per annum (MTPA) in the December quarter.

Ambuja Cement Q3 Results Review: 

The bottomline in the December quarter declined by a large percent YoY but the topline has done well. Higher expenses are the cause of worry for the management. The quarter was impacted by a steep escalation in fuel prices coupled with subdued demand in multiple regions. 

The management is happy with the overall year for Ambuja Cements. Neeraj Akhoury, the CEO, said, "Ambuja delivered a strong full-year performance with an EBIT growth of 25% for the full year backed by strong performance in volume, product mix, and operational efficiencies combined with a significant acceleration in volumes under the master supply agreement with ACC."

Brokerage View

Emkay Global has a BUY call on Ambuja Cements with a target price of Rs 450. The time period given by the brokerage house is one year to reach a defined target.

Given the lower profit numbers, the share price of Ambuja Cement was down by 5.06% on Friday afternoon and stood at Rs 341.20 per share.