Ambuja Cements’ profit slumps 90% on higher costs, high previous-year base

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 and sustainable profitability,” it said.Live EventsThe company’s cost of production rose to Rs 4,410 per tonne from Rs 4,155 a year ago, while the EBITDA made on each tonne of cement fell to Rs 770 from Rs 1,061 a year ago.“We are on track achieving our cost target of Rs 4,250 per tonne by FY’27,” chief executive officer Vinod Bahety said in a statement.

“Volumes are expected to grow ahead of the industry in H2 FY’27, supported by accelerated trade volumes and calibrated institutional sales,” he said.The company’s board also approved buying a 26% stake in power project company SWE Renewables for Rs 33.75 crore. The acquisition will help optimise electricity cost and increase the share of renewable energy in its overall energy mix by procuring wind power through a captive structure, the company said. (You can now subscribe to our ETMarkets WhatsApp channel)