Ambuja Cement witnesses increasing pressure on margins

News:Ambuja Cement reported further margin contraction of 651 bps QoQ to 15.2% on account of higher fuel prices and flat realisations. Revenues were up 15.4% QoQ (up 6.3% YoY) to Rs.3735 crore. PAT was down 36.2% YoY, 28% QoQ to Rs.317.4 crore mainly due to lower operating performance and exceptional charge of Rs.65.7 crore due to restructuring.

Views: Despite higher cost pressure, the company failed to pass on the cost pressure as we believe the company would have resorted to volume push during Q4CY21 that eroded its margin profile further vs. our estimates, in our view.

Impact: Negative