Financial Insights

Ambuja Cements profits fall 26% in Q4

Indian cement giant Ambuja Cements reported a 25.56% decline in profits on account of higher costs. Profit for this quarter was Rs 495 crores against Rs 665 crores last year. However, the company did manage to beat the estimated figure of Rs 404.8 crores.

The company’s revenues grew 7.7% from Rs 3,579 crores to Rs 3,855 crores as it’s sales volume rose by 3% to 7.5 million. The lower profits for this quarter was on account higher operating costs, 18.5% higher than the same last year.

“The January-March 2022 quarter was impacted by rising fuel prices, due to which Ebitda during the quarter was lower by 19%. This was partly mitigated by boosting efficiencies under our flagship ‘I CAN’ programme. Supported by the master supply agreement with ACC we further reduced our logistics costs,” said Neeraj Akhoury, CEO of Holcim India and CEO & MD of Ambuja Cements.

Recently, Holcim Group, the owner of Ambuja Cements announced that it was putting Ambuja Cements and ACC Ltd., both of it’s Indian cement businesses, up for sale. This would mark the exit of the Cement Giant from India after 17 years of business.

The announcement led to a frenzy in the market as major players tried to acquire controlling stake in the Indian cement giants. Adani Group is rumored to have raised assurances of $10 billion from local and international lenders. The group is also holding talks to acquire the companies.

Radhakishan Damani, holder of 23% stake in India Cements, has also expressed his interest in the sale and claimed to invest Rs 10,000 crores as a financial partner. JSW has also brought up several PE firms and lenders to raise a sum of $11 billion for the deal.

Both shares have rallied upwards since the date of the announcement of sale. However, ACC’s stock fell 2.3% to Rs 2,326.50 per share today while Ambuja Cements fell over 3% to Rs 371.75 per share.

Highlight by Aman Agarwal.

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