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Yes Securities Report
Ambuja Cements Ltd. performance came as anticipated, Volume and net sales realisation growth of 8% and flat YoY translates in revenue growth of 8% YoY to Rs 42.6 billion (versus our estimate of Rs 43 billion). Ebitda came at Rs 7.9 billion (flat YoY) translates to Rs 973/tonne against our estimate of Rs 938/tonne).
Reported profit after tax came at Rs 5 billion up by 2% YoY on account of higher other income (dividend from ACC Ltd.) and exceptional items (restructuring cost).
For FY23, Ambuja Cements reported exceptional item of Rs 1.62 billion (includes Rs 206 million as special incentives to employees, Rs 559 million as IT transition cost and Rs 807 million as restructuring cost).
In recent years, Ambuja Cements narrowed the efficiency gap with its peers by adopting cost effective measures. Furthermore, the efficiencies are expected to improve with fresh set of investments in;
augmenting waste heat recovery system and renewable energy capacities,
ramp up alternative fuel and raw material usage,
installing fly ash dryers and other debottlenecking measures to improve kiln efficiencies,
higher trade and blending ratio (80 and 85% currently).
Therefore, we increased our Ebitda/profit after tax estimate by 4/10% for FY24 and 6/12% for FY25 on account of improving efficiencies and higher other income (dividend from ACC Ltd.).
Ambuja Cements is a net cash company holding a significant cash and cash equivalent of Rs 90 billion as of March 2023.
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