Ambuja Cements faced severe margin erosion as higher costs for fuel, coal, and packaging pushed its production expenses to Rs 4,410 per tonne. Consolidated revenue and sales volumes remained essentially flat, providing little buffer against an overall operating expenditure increase that exceeded 6%. To lower future electricity expenses, the board approved an equity acquisition in a wind power firm, while management reiterated plans to reduce unit production costs to Rs 4,250 per tonne by FY27.
Key points
Flat top-line revenues of Rs 9,197 crore were insufficient to offset broad cost inflation…: Flat top-line revenues of Rs 9,197 crore were insufficient to offset broad cost inflation across fuel, petcoke, and logistics.
The company approved a Rs 33.75 crore deal for a 26% stake in SWE Renewables to lower pow…: The company approved a Rs 33.75 crore deal for a 26% stake in SWE Renewables to lower power costs.
Its consolidated net profit for the quarter stood at Rs 236 crore. This compares to Rs 2,336 crore a year ago, which had a tax write-back of Rs 1,710 crore. Consolidated revenue for the quarter remained flat at Rs 9,197 crore as compared to the Rs 9,185 crore a year ago. The company sold 16.5 million tonne of cement during the quarter, marginally lower than 16.6 million tonne sold the previous year.
While sales volumes and revenues remained at similar levels compared to the previous year, total expenses were over 6% higher at Rs 8,877 crore. Of this, power and fuel costs rose nearly 12% to Rs 2,552 crore.
This dragged the consolidated earnings before interest, tax, depreciation and amortization down by nearly 28% on year to Rs 1,271 crore. Operating margins declined to 13.8% from 19.2% a year ago.
“Elevated fuel and logistics costs, driven by higher petcoke and coal prices, constrained coal availability, and increased diesel and packaging costs, continue to weigh on industry margins,” the company said in a statement. “Ambuja prioritised market discipline, improved product mix…
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