Ambuja's Q4 net up 60% due to lower taxes and energy costs

Hit by demonetisation, the company sold 9% less cement; net sales dipped 7%

Ambuja Cements, part of cement giant LafargeHolcim, has posted a rise of 60 per cent in its net profit for the quarter ended December 2016, to Rs 160 crore from Rs 110 crore in the corresponding previous quarter. Higher profitability was on the back of lower tax charges and lower operating costs due to significant reduction in energy costs of 9 per cent. Ambuja increased usage of pet coke during the October-December quarter to 65 per cent against 50 per cent in the previous year.

The company could not eschew the impact of demonetisation. Its net sales dipped 6.75 per cent to Rs 2,197 crore during the quarter against Rs 2,356 crore in the previous corresponding quarter. Further, the company could sell only five million tonnes of cement during the quarter -- a decline of 8.75 per cent.

"The short term decline in sales was mainly felt in the last quarter when volumes were down by nine per cent as a result of cash shortages in the trade segment where Ambuja has a significant presence," said the company in a statement.

Ambuja has declared a final dividend of Rs 1.2 per share. Earlier, it had offered an interim dividend of Rs 1.6 to its shareholders.

In its outlook, the company said that it expected good cement growth in 2017. "The announcement of interest subsidy schemes and an interest rate cut, the recent announcement in the Union Budget for infrastructure development, including the award of infrastructure status to affordable housing and the increased budget allocation for roads, railways and irrigation will be key drivers for cement demand," it added.

The company's stock closed up 0.55 per cent at Rs 239.40, on the Bombay Stock Exchange on Monday.