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Informist, Wednesday, Oct. 16, 2024

 

By Sunil Raghu

 

AHMEDABAD – Lower on-year prices of cement and extended unseasonal rains in many parts of the country, resulting in lower construction activity and a delay in allocation of funds for infrastructure-related projects post the General Election, are expected to adversely impact the net profit and earnings of Ambuja Cements Ltd. in the Jul-Sept quarter. After remaining muted in July and August, cement demand gained some traction in September, but it is unlikely to provide a big leg-up, analysts said.

 

The cement maker is likely to report a 51.18% on-year fall in its net profit to INR 3.87 billion on net sales of INR 62.89 billion, a decline of 15.29% on year, according to an average of estimates from seven brokerage houses. In Jul-Sept 2023-24 (Apr-Mar), Ambuja Cements' revenue was INR 74.24 billion, while net profit was INR 7.93 billion. 

 

There was a huge variation in estimates by the seven analysts. Antique Stock Broking Ltd. sees Ambuja Cements posting the lowest net profit at INR 1.82 billion, while IDBI Capital Market Services Ltd. sees it posting the highest net profit at INR 6.34 billion in the September quarter. For revenue, Sharekhan Ltd.'s estimate of INR 38.03 billion is the lowest amongst all the estimates, while ICICI Securities Ltd.'s is the highest at INR 73.62 billion. The company is yet to announce the date for the release of its September quarter earnings.

 

In its report, IDBI Capital, which estimated the highest net profit, observed that the cement maker's realisations improved on quarter on the back of a price rise. It sees Ambuja Cements' earnings before interest, taxes, depreciation and amortisation, or EBITDA, per tonne rising 22.26% to INR 1,027 per tonne from INR 840 per tonne in Apr-Jun. ICICI Securities expects Ambuja Cements' realisations to fall 2% on quarter and the EBIDTA per tonne to decline 34% on year and 19% on quarter to INR 657 per tonne.

 

ICICI Securities, which estimated the highest net sales, sees consolidated volumes rising 9% on year, but dipping 10% on quarter. IDBI Capital expects flat on-year volume growth. According to the average of estimates from six brokerages, Ambuja Cements' EBITDA is pegged at INR 9.33 billion, with estimates ranging from INR 8.81 billion to INR 9.64 billion.

 

The key monitorable for analysts going forward is the management's commentary on volume guidance for FY25 and the sustainability of price hikes undertaken by cement companies in early October. At 0958 IST, shares of Ambuja Cements traded 0.8% lower at INR 585.35 on the National Stock Exchange.

 

Following are the Jul-Sept earnings estimates for Ambuja Cements based on reports from seven brokerage houses:

 

Brokerage firm	Net sales (in INR million)	Net profit (in INR million)	EBITDA (in INR million)
Antique Stock Broking Ltd	72,046	1,820	9,388
Axis Securities	70,090	4,270	9,370
Centrum Broking Ltd	67,878	4,001	8,806
Elara Securities (India) Pvt Ltd	70,286	4,266	9,642
ICICI Securities Ltd	73,623	3,918	9,365
IDBI Capital Market Services Ltd	48,248	6,336	9,437
Sharekhan Ltd	38,030	2,490	---
Average	62,885.86	3,871.57	9,334.67

 

End

 

Edited by Namrata Rao

 

 

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