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Axis Securities Report
Ambuja Cements Ltd. reported volume/revenue growth of 8%/8% YoY (above expectations) while Ebitda and Ebitda margin stood below our expectations. The company reported a profit of Rs 502 crore (above expectations), up 1% and 36%YoY and QoQ.
Ambuja Cements recorded an Ebitda margin of 18.5% (expectation of 19.4%) against 20.1% YoY. The quarter's volume stood at 8.1 million tonnes per annum, up 8% YoY and 5% QoQ. Ambuja Cement's Ebitda/tonne stood at Rs 973, down 8% YoY but higher by 20% QoQ and it reported blended realization/tonne of Rs 5,388 against Rs 5,241 YoY, up 3% YoY and flattish QoQ.
The company's cost/tonne was reduced by 6% QoQ to Rs 4,282 driven by lower power/fuel costs.
Outlook:
Given the company's superior positioning in key markets of North, West, and East regions, cost-saving initiatives undertaken, and synergies with other group companies of Adani, growth momentum is expected to continue moving ahead.
Furthermore, given the government's keen focus on infrastructure and low-cost affordable housing and revival in rural demand, we expect Ambuja Cement to improve its performance going forward.
We expect the company to grow its volume/revenue/Ebitda/adjusted profit after tax compound annual growth rate of 8%/10%/10%/12% over FY22-FY25E.
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