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Ambuja Cement hardens after good Q2 earnings

Capital Market 

Ambuja Cements rose 3.18% to Rs 207.40 after the company's standalone net profit jumped 10% to Rs 453.37 crore depite a 27% fall in net sales to Rs 2176.75 crore in Q2 June 2020 over Q2 June 2019.

Sales volume declined 29% to 4.19 million tonnes during the quarter as compared to 5.82 million tonnes recorded in the same period of previous year.

"Cost delivery for the quarter was pivoted around raw material, power & fuel, logistics costs and other fixed costs. Network optimization gained momentum due to acceleration of Master Supply Agreement (MSA) with ACC", the company said in a statement.

Consequently, operating EBITDA margin witnessed a margin expansion of 380 bps as it stood at 27.8% in April-June 2020 as against 24% in April-June 2019.

Absolute operating EBITDA for the quarter registered a decline of 15% to Rs 595 crore as compared to the corresponding quarter of the previous year.

Profit before tax in Q2 June 2020 stood at Rs 640.20 crore, up by 5.9% from Rs 604.68 crore in Q2 June 2019. Current tax expense fell 1.9% year-on-year (YoY) to Rs 204.04 crore during the quarter.

The company generated additional cash and cash equivalent of Rs 714 crore during January-June 2020.

The cement maker reported 26.6% fall in consolidated net profit to Rs 457.14 crore on a 34.3% decline in net sales to Rs 4644.17 crore in Q2 June 2020 over Q2 June 2019.

On the outlook front, the company said that economic activities have picked up post Government's decision to unlock the country. With resumption of economic activities, GDP growth is expected to enter a positive trajectory.

It further said that cement demand is also expected to rebound on account of normal monsoon, various policy support measures taken to enhance rural and agricultural incomes. Further, continued spend on infrastructure development and affordable housing is expected to boost demand growth in the mid-term.

Ambuja Cements, a part of the global conglomerate LafargeHolcim, is among the leading cement companies in India. The firm operates through cement and cement related products segment.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, July 27 2020. 10:59 IST