Ambuja Cements, a key player within the Adani Group, faced a challenging second quarter in fiscal year 2024, reporting a 42.5% drop in consolidated net profit year-on-year (YoY). The profit, falling from ₹792.96 crore last year to ₹455.96 crore, reflects pressure from rising costs, which also led to a sequential decline of 28.7% compared to the previous quarter. However, Ambuja achieved a strong 9% increase in volume growth, producing 14.2 million tonnes—the highest Q2 volume for the company in five years. Revenue reached a record ₹7,516 crore, marking a modest 1.24% increase from the same period last year.
Amid cost pressures, consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at ₹1,111 crore, down 15% YoY, with the EBITDA margin contracting to 14.8%. CEO Ajay Kapur highlighted the company’s resilience, noting its continued focus on efficiency, digital transformation, and environmental, social, and governance (ESG) commitments. These elements are seen as pillars of Ambuja’s long-term growth strategy, despite the cost challenges in the quarter.
The company has pursued ambitious expansion plans under Adani Group’s strategic vision, with the recent acquisition of Orient Cement positioning Ambuja closer to its goal of reaching 100 million tonnes per annum (MTPA) by year-end. Currently, Ambuja and its subsidiaries have a combined capacity of 89 MTPA, backed by 22 integrated plants and 21 grinding units across India.
Operational efficiency has also improved, with a working capital cycle reduced to 33 days, enhancing liquidity through optimized inventory and receivables management. Looking ahead, Ambuja expects to benefit from the increased demand driven by infrastructure and housing projects, including the PMAY Urban Housing 2.0 initiative, which aims to boost affordable housing with a budget allocation of ₹11 lakh crore. This demand is supported by government investment in roads, railways, and urban infrastructure, with the cement industry forecasted to grow by 4-5% in FY24-25.
On the stock market, Ambuja Cements has gained momentum, with shares trading over 3% higher at ₹570.50, delivering a strong one-year return of more than 32%.
Disclaimer: The information provided in this report is for informational purposes only and should not be considered financial advice. Readers are encouraged to conduct their own research or consult with a financial advisor before making investment decisions.
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