Ambuja Cement - Q1CY22 First Cut - ICICI Direct

(CMP: Rs. 383; MCap: Rs. 76,080 crore)

Ambuja Cement's results remained ahead of our estimates for Q1CY22 driven by strong cost control measures. The key surprise being lower power & fuel costs which was down 12.5% QoQ amid sharp rise in the energy prices.

Q1CY22 Earnings Summary

- Revenues were up 8.4% YoY to Rs. 3925 crore (inline with I-direct est: Rs. 3943 crore). Sales volumes were up 3.5% YoY to 7.49MT (Vs I-direct est: 7.4MT). Realisations were also higher by 4.8% YoY (flat QoQ) to Rs. 5,241/t (vs I-direct est: Rs. 5,328/t). On QoQ basis, revenues were up by 5.1% mainly led by volumes

- Reported EBITDA of Rs. 790.4 crore remained ahead of our estimates due to lower than expected cost of production. EBITDA margins were up 493bps QoQ to 20.1% (vs I-direct estimate of 15.9%) led by lower power & fuel costs/t (down 12.5% QoQ, up 35.5% YoY to Rs. 1376/t) and lower other expenses (down 18.6% QoQ, up 3.3% YoY on per tonne basis). As a result, total cost of production were down 5.4% QoQ to Rs. 4185/t vs (I-direct est: Rs. 4481/t

- On per tonne basis, EBITDA/t of Rs. 1055/t (down 21.8% YoY, up 33% QoQ) remained higher than I-direct est: Rs. 847/t

- Net profit of Rs. 495.2 crore (down 25.5% YoY, up 56% QoQ) also remained better than I-direct est: Rs. 443.7 crore

The Greenfield project at Marwar Mundwa, Rajasthan (1.8MT Cement, 3MT Clinker) already got commissioned Q3CY21 that took its total capacity to 31.5MT. This would further improve cement sales by ~5MT annually. The company is currently executing cement capacity expansion of 1.5MT at Ropar, Punjab and also taking debottlenecking initiatives across various plants. Further the company is doing an investment of Rs. 3,500 crores for a cement grinding expansion plan of potential 7.0MT across their existing grinding units at Sankrail and Farakka and at a greenfield location at Barh, in Bihar, supported by a 3.2MT brownfield clinker expansion at existing integrated plant in Bhatapara, Chhattisgarh.

We would be coming out with detailed report soon.

Shares of Ambuja Cements Limited was last trading in BSE at Rs. 371.85 as compared to the previous close of Rs. 383.55. The total number of shares traded during the day was 348944 in over 8523 trades.

The stock hit an intraday high of Rs. 385.60 and intraday low of 370.55. The net turnover during the day was Rs. 132041246.00.

Source : Equity Bulls

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AmbujaCements INE079A01024 Q1CY22 Results FirstCut ICICIDirect