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Informist, Saturday, Apr. 26, 2025

By Sunil Raghu

AHMEDABAD – Improved demand and rising government spend in Jan-Mar has helped cement makers in the country record higher volumes compared to a quarter ago. Cement makers also raised selling prices in the March quarter. All these positives have, however, failed to enthuse analysts, who say cement makers will report lower earnings before interest, tax, depreciation, and amortisation per tonne for the March quarter. The performance of Ambuja Cements Ltd. is expected to be no different.

Ambuja Cements is likely to report a 23.4% year-on-year fall in its consolidated net profit at INR 8.1 billion rupees on net sales of INR 99.1 billion, a jump of 11.4% year-on-year, according to the average of the estimates of 14 brokerage houses. 

The company will announce its Jan-Mar earnings on Tuesday.

Ambuja Cements had reported revenue of INR 88.9 billion for the year-ago quarter, while the net profit was INR 10.6 billion. For the December quarter, the revenue was INR 93.3 billion and net profit was INR 21.2 billion. 

Shares of Ambuja Cements closed 4.1% lower at INR 548.70 on the National Stock Exchange on Friday. At this price, the stock is up about 5% from INR 522.1 per share at the close of the day the company announced its December quarter earnings on Jan. 29.

The demand scenario appears so befogged that there is little agreement even among analysts on the financials of the Adani group cement maker. Among the 14 analysts, there is a huge variation in estimates, with Systematix Shares and Stocks (India) Ltd. expecting a net profit of INR 13.4 billion in Jan-Mar, and Motilal Oswal Financial Services Ltd estimating the net profit at INR 3.8 billion. As for revenue, Systematix Shares and Stocks (India) Ltd has the highest estimate at INR 107.2 billion and YES Securities (India) Ltd. has lowest at INR 89.7 billion.

Systematix, which among all the 14 analysts polled estimates the highest net profit and revenue and the second-highest EBITDA for the March quarter, says the cement maker's volumes are likely to rise 12.7% on year. It sees overall EBITDA per tonne at over INR 1,100, led by price discipline, established brand reputation, and superior cost initiatives.

Motilal Oswal sees consolidated volume for Ambuja Cements rising 15% on year and blended realisation falling 4% on year. It pegs Ambuja Cements' consolidated EBITDA per tonne at INR 752, against INR 1,025 in the year-ago quarter and INR 537 in the December quarter. Motilal has a buy call on the second biggest cement player in the country, with a target price of INR 650 per share.

Kotak Securities on its part sees volumes at 18.6 million tonnes, up 12% on year, led by a ramp-up of acquired capacity and seasonal tailwinds. It expects costs per tonne to fall 4.6% on year in the March quarter due to "operating leverage" and muted costs. It sees Ambuja Cements' EBITDA per tonne at INR 892, down 12.8% on year but up 66% on quarter, led by a combination of lower costs and higher prices.

Meanwhile, the average estimate by 14 analysts pegs Ambuja Cements' earnings before interest, taxation, depreciation and amortisation, or EBITDA, at INR 16.4 billion, with a range of INR 11.4 billion-INR 22 billion.

Following are the Jan-Mar earnings estimates for Ambuja Cements Ltd based on reports from 14 brokerage firms in descending order of the estimate of net profit: 

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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