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Informist, Wednesday, Jul. 30, 2025

 

By Sunil Raghu

 

AHMEDABAD – Contributions from the recently acquired Orient Cement Ltd., moderating electricity and fuel costs, and an increase in cement prices may see the country's second-largest cement manufacturer report a growth in its net profit and revenue on a year-on-year basis. Analysts tracking the company also predict a jump in its earnings before interest, tax, depreciation, and amortisation, or EBITDA, per tonne of sales. The only challenge brokerages foresee for the company is a likely fall in demand in late May and June due to the early onset of monsoon in many parts of the country.

 

The cement maker is expected to report a 39.94% on-year jump in its consolidated net profit to INR 8.95 billion on a 16.92% on-year rise in net sales to INR 97.18 billion, according to the average of estimates from 12 brokerages. The company is scheduled to announce its June quarter earnings on Thursday.

 

Revenue for Ambuja Cements in the June quarter of 2024-25 (Apr-Mar) was INR 83.11 billion, while net profit was nearly INR 6.40 billion. For the March quarter of FY25, revenues stood at INR 98.89 billion and net profit at INR 9.56 billion. 

 

The demand scenario appears so unclear that there is little agreement among analysts on the financials of the Adani Group's cement maker and seller. Among the 12 analysts, there is a huge variation in estimates, with Systematix Shares and Stocks (India) Ltd. expecting Ambuja Cements to achieve a net profit of INR 13.1 billion in the June quarter, while Motilal Oswal Financial Services Ltd. estimates its net profit at INR 5 billion. As for revenue, Nuvama Wealth Management Ltd. has the highest estimate at INR 109.64 billion while Prabhudas Lilladher Pvt. Ltd. has the lowest at INR 91.76 billion.

 

Systematix, which has the highest net profit estimate for Ambuja Cements, said in its report that the cement maker's volumes are likely to rise 8.2% on year. It expects the overall EBITDA per tonne to increase 39.9% on year and 13.5% from the trailing quarter to INR 1,133, driven by improved realisations and moderating power and fuel costs during the quarter.

 

Motilal Oswal Financial Services, which has the lowest net profit estimate, expects Ambuja Cements' consolidated volumes to rise 15% on year and blended realisations to increase 3%. It projects the company's consolidated EBITDA per tonne at INR 1,002, compared with INR 810 in the year-ago quarter and INR 1,001 in the March quarter.

 

Kotak Securities expects volumes at 17.6 million tonnes, up 11.3% on year, aided by a ramp-up of acquired capacity and price hikes. Kotak estimates the cost per tonne for Ambuja Cements to decline 3.1% on year but rise marginally by 0.6% on quarter due to "operating deleverage" and higher fuel costs. The brokerage expects Ambuja Cements' EBITDA per tonne to increase to INR 1,111, up 37% on year and 11.3% on quarter, led by higher cement prices.

 

Meanwhile, the average of estimates by 12 analysts pegs Ambuja Cements' EBITDA at INR 19.3 billion, with a range of INR 17.9 billion-INR 21.7 billion.

 

On Wednesday, shares of Ambuja Cements ended at INR 617.85 on the National Stock Exchange, up 1.3% from the previous day. The stock is up 15.7% since the company announced its March quarter earnings.  

 

Of the 12 research reports available on the company with Informist, 10 have a 'buy' or equivalent rating on the stock with target prices in the range of INR 470-INR 690 per share, while one has desisted from rating the stock with a target price, and one has a 'sell' rating with a target price of INR 453.

 

The brokerages seem keen to know the status of the consolidation of all of Adani group's cement operations under one entity and the likelihood of the group promoting "Adani Cement" as the mother brand. Other than merging acquired cement brands such as Sanghi Cement, Penna Cement, or Orient Cements, into Ambuja Cements, the group is also reportedly in the process of merging Ambuja Cements and ACC brands.

 

Following are the June quarter earnings estimates for Ambuja Cements Ltd. based on reports from 12 brokerage firms in descending order of the estimate of net profit: 

 

Brokerage firm	Net sales (in INR million)	Net profit (in INR million)	EBITDA (in INR million)
Systematix Shares and Stocks (India) Ltd	92,500	13,100	19,400
Nuvama Wealth Management Ltd	109,638	12,000	19,434
Nirmal Bang Equities Pvt Ltd	92,273	10,743	17,850
Prabhudas Lilladher Pvt Ltd	91,761	10,693	18,156
YES Securities (India) Ltd	100,274	10,358	21,660
Kotak Institutional Equities	95,401	8,667	19,541
JM Financial Institutional Securities Pvt Ltd	100,775	8,113	19,528
Dolat Capital Market Pvt. Ltd.	96,332	7,809	19,628
ICICI Securities Ltd	98,121	7,489	20,199
Antique Stock Broking Ltd	97,909	6,863	19,225
HDFC Securities Ltd.	92,682	6,616	18,320
Motilal Oswal Financial Services Ltd	98,500	5,000	18,100
Average	97,180.50	8,954.25	19,255.92

 

End

 

Edited by Tanima Banerjee

 

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