Ambuja Cements has reported 23% decline (year-on-year) in its net profit to Rs 312 crore for the March quarter of FY12 due to an additional depreciation charge of Rs 289 crore. Sales, however increased 19% to Rs 2213 crore year-on-year.
These numbers are below CNBC-TV18's poll which had estimated the company to report a profit after tax of Rs 451.
Ambuja's sales volume will be led by higher volumes owing to capacity additions coupled with demand pick up: The company's dispatches grew 9.8% to 6.09 metric tonnes versus 5.55 mt (YoY)
The company has hiked cement prices in March, to pass through the 20% railways freight increase and also excise duty hike in the budget.
Analysts say commissioning of fresh capacities, announcement of the next round of capex, increase in production cost and cement-price outlook is a thing to look out for in FY13..
Also, industry watchers say that cement sector has been performing reasonably well over the past several weeks. Summer and pre-monsoon are normally always a good time for cement stocks and cement companies to perform well.
It may be recalled that In FY11, the industry witnessed a steep fall in margins. The demand slowdown coupled with the inability of cement players to pass on rising costs led to drop in margins. Profitability has shown some improvement in FY12 and there has been a marginal improvement in the margins despite the rise in costs.
Future outlook: The company is likely to invest Rs 1,800 crore by 2013:
-Ambuja has healthy cash and cash equivalents of approximately Rs 2300 crore
-Will set up a 2.2-million-tonne clinkerisation unit at Nagaur in Rajasthan
-Expand its footprint in the southern markets by setting up a new bulk cement terminal at Mangalore
-Also a new brownfield expansion project to enhance capacity at its Sankrail grinding unit in West Bengal has also been initiated
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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