Ambuja Cements hits 52-week low; stock dips 5%

The stock has under-performed the market by 18% in the past one month compared to a 8% decline in the Sensex.

Shares of Ambuja Cements have dipped to 52-week lows, down 5% at Rs 198, on the BSE.

The stock of cement manufacture has under-performed the market by 18% in the past one month from Rs 240 on July 24, after the company reported weak June quarter results on account of persisting weak demand and an aggressive price war in the north and west regions of India. The S&P BSE Sensex was down 8% during the same period.

The company had reported 45% year-on-year (Y-o-Y) drop in standalone net profit at Rs 226 crore in the June quarter against Rs 409 crore in the corresponding quarter of previous year. Net sales declined by 7.9% at Rs 2,493 crore.

On outlook, Ambuja Cements said that mixed micro-economic indicators point towards sluggish growth in cement demand in the short term. With the onset of monsoon throughout the country, cement demand is expected to remain subdued in the next quarter.

The long-term outlook for cement demand remains positive due to the government’s initiatives towards housing, concrete roads, smart cities and emphasis on infrastructure developments, the company added.