Ambuja Cements Falls 2.5% as Q4 Margins Slide 530 bps 

Shares of Ambuja Cements Limited dropped to a day low of Rs 432.30 on 5 May on the NSE, extending a sell-off triggered by weak Q4 operational performance, even as the company posted record quarterly revenue of Rs 10,915 crore.

Revenue climbed 9% year-on-year, with cement volumes rising 10% to 19.9 million tonnes. But costs moved faster than sales. EBITDA fell 22% YoY to Rs 1,464 crore, and EBITDA margin contracted by 530 basis points to 13.4% from 18.7% in the same quarter last year. The culprits, per the company’s disclosures, were rising petcoke prices, higher freight costs, packaging constraints and labour disruptions at plant level.

Reported consolidated net profit looked better at first, climbing to Rs 1,857 crore from Rs 1,351 crore. Strip out the one-time tax reversals linked to the Sanghi Industries and Penna Cement mergers, though, and normalised net profit dropped to Rs 569 crore, down 34% YoY. That gap between headline and normalised profit is the real story of this quarter.

The company has flagged a cost reduction target of around Rs 500 per tonne. Management says this, combined with improved capacity utilisation, could support margins going forward. Ambuja’s total market capitalisation stood at Rs 1,08,241.15 crore per the NSE dashboard.

At 11:00 am on 5 May, shares of Ambuja Cements were trading down by 2.71% at Rs 433.25 on the NSE. Over one year, the stock has shed 19.12%, against the Nifty Next 50’s gain of 7.62% in the same period.

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