- 02 May 2024
- ICICI Securities
Strong operational performance led by healthy volume growth
AMBUJACEM - 615 Change: 2.15 (0.35 %)News: Consolidated revenue increased by 11.6% YoY (+9.4% QoQ) to Rs 8,894 crore, led by volume growth of 17.7% YoY (+17.7% QoQ). Realization declined by 5.2% YoY (-7.1% QoQ), which partially negated the impact of strong volume growth. EBITDA increased by 36.7% YoY to Rs 1698.7 crore as EBITDA/ton improved substantially by 16.1% YoY to Rs 1023/ton (led by lower power & fuel cost, freight cost & positive operating leverage). Sequentially, EBITDA declined by 2% as EBITDA/ton was down by 16.7% (mainly due to lower realization and higher RM cost). Net profit increased by 63.6% YoY (+28.2% QoQ) to Rs 1055.2 crores. For FY24, revenue is up 7% YoY to Rs 33160 crore (led by volume growth of 8.2% YoY) with EBITDA/ton stands at Rs 980/ton (vs Rs 803/ton in FY23)
Views: Operational performance was largely in-line with expectations. Going forward, we expect Ambuja will continue to show strong volume growth (led by aggressive capacity expansion plan and master supply agreement with group company - Sanghi Industries) and further improvement in EBITDA/ton. Company is in process of expanding its consolidated cement capacity to 100 mtpa by FY26E and 140 mtpa by FY28E (from 79 mtpa at present). On the cost front, company targets to reduce total cost by ~Rs 530/ton over the next 4 years (which implies EBITDA/ton of Rs 1500+/ton by FY28E from current level of Rs 1080/ton). The overall cost reduction will be primarily led by optimizing power & fuel costs with potential synergy benefits from group companies. Moreover, increase in realizations in the longer term (driven by improvement in industry’s utilization rates) to further help in margins expansion.
Impact: Positive