Ambuja Cements on April 27 reported a consolidated profit of Rs 742.59 crore in Q1 CY20, a 6.8 percent growth over the same period last year.
The growth in bottomline was driven by strong operating numbers, but sales volumes dropped 11.9 percent YoY to 12.19 million tonne partly due to lockdown announced towards March-end.
Consolidated revenue from operations dropped 8.5 percent year-on-year to Rs 6,249.66 crore due to a fall in sales volumes.
Consolidated numbers included its subsidiary ACC’s earnings. The company follows January-December as its financial year.
In the near term, the management expects demand to stabilise due to normal monsoon and policy support measures taken by the government and the Reserve Bank.
“Once the lockdown lifts, rural demand and construction sectors like road and irrigation will gather pace. India’s push for infrastructure, housing for all and urbanisation will collectively drive demand growth in the mid-term,” it said.
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At operating level, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) grew 19.5 percent YoY to Rs 1,191.33 crore. Margin shot up 454 bps to 19.4 percent due to fall in power and fuel cost (down 13.7 percent) and freight and forwarding expenses (down 11.1 percent YoY).
Other income during the quarter dropped 46 percent to Rs 141.81 crore compared to year-ago.
On standalone basis, Ambuja Cements’ Q1 CY20 profit declined 6.5 percent YoY to Rs 399.1 crore and revenue fell 3.4 percent to Rs 2,827.54 crore.
Sales volumes for the quarter dropped 9.6 percent YoY to 5.76 million tonne, but cement realisation increased around 6 percent YoY during the quarter.
The management said volumes grew till February due to robust demand. “March quarter witnessed a reduction in key costs led by power and fuel on account of improvement of operational efficiencies and lower prices. Logistics costs have also seen an improvement due to sharper focus on efficiencies,” it said.
As a result, the operating EBITDA stood at Rs 603 crore in Q1 CY20, rising 30 percent YoY, and margin improved by 560 bps YoY to 21.9 percent in the March quarter.