Ambuja Cements, India’s second-largest cement maker by market capitalization, reported a smaller-than-expected fourth-quarter profit rise on Wednesday due to lower prices.
WHY IT IS IMPORTANT
Cement makers are expected to report lower sales revenue during the fourth quarter, due to a nearly 5% sequential decline in cement prices in India.
In March, cement manufacturers generally announce large volumes, because they lower prices in order to absorb end-of-year stocks. Analysts also expect lower fuel costs and domestic coke prices to help offset weak cement prices.
UltraTech Cement, India’s largest cement maker by market value, along with Dalmia Bharat and ACC reported better-than-expected profits so far in the fourth quarter. These companies saw their significant sales volumes offset the drop in prices during the quarter.
BY THE NUMBERS
The Adani Group-backed company said on Wednesday its profit after tax for the quarter ended March 31 rose to 5.32 billion rupees ($63.7 million), from 5.02 billion rupees a year ago. a year. Analysts, on average, estimated that the company would report a profit of Rs 7.56 billion, according to LSEG data.
Nonetheless, operating revenue rose 12.3 percent to 47.80 billion rupees, beating analysts’ estimates of 47.72 billion rupees.
WHAT IS THE NEXT STEP ?
The company expects the outlook for the cement industry to remain positive, driven by pre-election spending, the government’s focus on infrastructure development and sustained real estate activity.
Ambuja Cements says it will benefit from cost control and synergy with group companies, which will help it maintain its leading position in the industry market.
($1 = 83.4905 Indian rupees)
