Ambuja Cements reported a net profit of Rs. 752 for the fiscal year ending June 2022.
Cement maker Ambuja reported a 14.2% drop in consolidated net profit to Rs 752 crore for the quarter ended June 2022 compared to June 2021. This was due to higher power and fuel costs and freight expenses, while the revenue climbed 15.1% YoY to Rs 8,033 crore.
The consolidated net sales rose 15.1% to Rs 7,943 crore in the April-June period versus the same period last year, while earnings before interest, tax, depreciation and amortisation (Ebitda) fell 39% to Rs 1,115 crore during the quarter. The company’s Ebitda margin stood at 14% during the quarter, a sharp fall from the 26.5 per cent reported in the same period last year. Last week, ACC’s net profit fell 60 percent year-on-year to Rs 227 crore, while net sales grew 15 percent over the year-ago period to Rs 4,468 crore.
Future Prospects
The company reported total expenses of Rs 7,276.72 crore in the June quarter. The expenses increased by 33.09% from Rs 5,467.33 crore in the year-ago period. The sales volume was up 15.1% in the April-June quarter at 7.39 million tonnes per annum (MTPA) from 6.42 MTPA in the corresponding quarter. The company recorded robust volume growth of 15% and top-line growth of 18% in the quarter. However, the April to June 2022 quarter was impacted by rising fuel prices and related inflationary impacts.
The company invested in a 3.2 MTPA brownfield clinker at Bhatapara and a 7.0 MTPA cement grinding expansion at its existing locations (Sankrail and Farakka). A greenfield grinding unit at Barh, Bihar. The company is acquiring limestone reserves to support long-term growth. The recovery in domestic economic activity is gathering strength. Rural consumption should benefit from the likely normal monsoon. The investment activity is expected to be supported by improving capacity utilisation, the government’s capex push, and strengthening bank credit. Geopolitical tensions, elevated commodity prices, supply bottlenecks, and tightening global financial conditions are key factors to look at.
Valuations:
The EPS stood at Rs. 3.79 for June 2022, which was at Rs. 3.32 in March 2022 and Rs. 4.42 in June 2021. The stock has a ROCE of 22.1% and a ROE of 11.8%. The P/E ratio is now 33.1x, up from 20.9x five years ago. The EBITDA is at 13.1x and the return on assets is at 8.94%. The interest coverage ratio is 29.2x and the asset turnover ratio is 0.68. The share is trading at a price of Rs.402, up by 1.35%.
