Ambuja Cements gains after Q4 PAT rises 41% YoY

Ambuja Cements rose 0.60% to Rs 284.55 after the company reported 41% rise in standalone net profit to Rs 497 crore in Q4 December 2020 from Rs 352 crore in Q4 December 2019.

Volumes grew by 7% YoY and supported by good price this has resulted in a 14% YoY growth in net sales. Net sales during the quarter stood at Rs 3,468 crore compared to Rs 3,038 crore in the corresponding quarter of the previous year.

Total operating cost per ton declined by 2% YoY supported by operational efficiency programs in the plants as well as logistics efficiencies. These have been partly compensated due to impact of rising fuel costs.

EBITDA during the quarter at Rs 768 crore showed a growth of 40% YoY and operating EBIT at Rs 642 crore showed a robust growth of 61% YoY.

Ambuja generated Rs 2,606 crore from operations led by improved performance and efficient working capital management.

Profit before tax in Q4 December 2020 stood at Rs 658 crore, up by 49% from Rs 441 crore in Q4 December 2019. Tax expense during the quarter increased by 80% year-on-year (YoY) to Rs 161 crore.

The cement maker said that the Greenfield project at Marwar Mundwa, Rajasthan, will commission this year. This will further improve the company's market position in North and West regions.

On a consolidated basis, the company's net profit increased by 34% to Rs 968 crore on 6% rise in net sales to Rs 7350 crore in Q4 December 2020 over Q4 December 2019.

The cement major reported 12% rise in consolidated net profit to Rs 3107 crore on 9% decline in net sales to Rs 24,094 crore in the year ended December 2020 over the year ended December 2019.

The company's board of directors have recommended a final dividend on equity shares of Rs 1 per equity share. The company has paid interim dividend of Rs 17 per equity share.

In its outlook, Ambuja said that the Union Budget 2021 will give an impetus to India's economic growth with its strong focus on domestic manufacturing, infrastructure development, public sector undertaking (PSU) privatization, and continued focus on healthcare, rural and social development. The company expects that these overall economic measures along with continued focus on rural economy and affordable housing segment to positively impact cement demand.

Ambuja Cements is one of the leading cement companies in India. It is part of the LafargeHolcim Group, the world leader in the building materials industry, with a presence in around 70 countries, and a focus on cement, aggregates, ready-mix concrete and solutions & products.

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