Ambuja Cements Q3 net profit up 34 pc at Rs 533 cr

Ambuja Cements on Friday reported 34.80 per cent rise in consolidated net profit to Rs 533.85 crore for the third quarter ended September 30, mainly driven by reduction in logistic costs and growth in premium products.

The company, which follows January to December financial year, had clocked a net profit of Rs 396.01 crore in the same period a year-ago, Ambuja Cements said in a BSE filing.

Its total income was at Rs 6,190.14 crore, up 1.51 per cent, in the period under review as against Rs 6,097.53 crore in the corresponding quarter of the previous fiscal.

Ambuja Cements total expenses were down 2.44 per cent at Rs 5,401.27 crore, compared to Rs 5,536.68 crore.

On a standalone basis, Ambuja Cements - part of Swiss firm LafargeHolcim - reported 31.36 per cent increase in net profit to Rs 234.61 crore in the July-September quarter over Rs 178.60 crore in the year-ago period.

Its total income on standalone basis was at Rs 2,688.87 crore, marginally up 1 per cent, as against Rs 2,662.15 crore in the corresponding September quarter.

However, Ambuja Cements sales volume has declined 4.39 per cent to 5.46 MT in the quarter as against 5.23 MT in the same period last fiscal.

"Volumes declined Y-o-Y on account of heavy rains and floods in States of UP, Bihar, Maharashtra and Gujarat," the company said in the investor presentation on the financial results.

While its subsidiary ACC Ltd net sales was up 3 per cent to Rs 3,464 crore compared to Rs 3,364 crore in the same quarter last year.

Commenting on the results, Ambuja Cements Managing Director and CEO Bimlendra Jha said: "This has been possible with a clear focus on product mix enrichment and reduction in logistics costs. Premium products registered a growth of 17 per cent year on year and the company maintained its progress on fossil fuel substitution with alternative fuels and renewable energy".

Meanwhile, in a separate filing, Ambuja Cements informed that its board in a meeting held on Thursday has approved merger of Dirk India Pvt Ltd, its 100 per cent subsidiary with itself, subject to necessary regulatory approvals.

Dirk India is in the business of processing of Fly ash into "Pozzocrete" and is also engaged in a job work for Ambuja Cements by manufacturing cement at its Nasik facility. It had a revenue of Rs 23.63 crore in FY 2018-19.

Over the outlook, the company said that recent reforms announced by the government as sharp cut in corporate tax, aggressive divestment plan coupled with the Reserve Bank of India's latest interest rate cuts, ought to augur well for the economy.

"These measures should support growth and hence boost cement demand. Healthy monsoon bodes well for rural housing demand which is a key segment for cement. The above factors along with higher spends in infrastructure and affordable housing are also expected to favour demand," the company said.

Shares of Ambuja Cements Ltd on Friday settled at Rs 207.65 apiece on the BSE, up 0.41 per cent from previous close.