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Ambuja Cements Q2FY18 net profit rises; prospects set to improve

SMC | 30 Oct, 2017  | Follow Author | Add to my Favourites 
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Ambuja Cements Ltd. reported an increase in the net profit while operating performance was in line as volumes rose and contraction in other income was less than estimated.

The company has reported net sales of Rs.5376.87 crores during the period ended September 30, 2017 as compared to Rs.4471.51 crores during the period ended September 30, 2016. The company has posted net profit of Rs.351.29 crores for the period ended September 30, 2017 as against Rs.234.31 crores for the period ended September 30, 2016.

The company sold 10.98 million tonne of cement during the quarter, a rise of 14.9 per cent against 9.56 million tonne. The combined capacity of Ambuja stands Rs 63 million tonne per annum.

Operating margin (OPM) increased by 114 bps to 14.37% as a result, the operating profit (OP) was up 31% to Rs 772.79 crore.

Other income dropped by 22% to Rs 75.81 crore. The interest cost went up by 26% to Rs 51.57 crore. The depreciation cost shed 5% to Rs 297.07 crore. Thus the PBT increased by 50% to Rs 499.96 crore. The Tax outflow went up 49% to Rs 148.67 crore. Thus, net profit increased 50% to Rs 351.29 crore.


The government has identified the construction and infrastructure sector as one of the key sectors that will help improve overall economic growth. Infrastructure projects in the areas of power, irrigation, roads, metros and railways, as well as dedicated freight and industrial corridors, are likely to generate strong cement demand in the country. Furthermore, increased spending on affordable and low cost housing coupled with the normal monsoon is expected to boost the rural economy which augurs well for the cement industry.

Ajay Kapur, Managing Director and CEO, Ambuja Cement said: Ambuja Cement has delivered a strong set of results. We have focused on building brand equity, and providing value to our customers through differentiated offerings for individual home builders, building andinfrastructure segments. Our strategy to focus on key markets, premium products and value based pricing has paid off, leading to strong net sales and EBITDA growth. Our pan-India Ambuja Knowledge Centres impart education on world class construction best practices. We are advantaged by our well spread network of dealers and retailers, as well as the opportunity to leverage the global best practices of our parent LafargeHolcim to deliver sustainable.performance".

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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