Higher sales, price hike help Ambuja post profit in Q3

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Higher sales, price hike help Ambuja post profit in Q3

Ambuja Cements has announced its third quarter results. The company's Q3 net profit was up at Rs 171 crore versus Rs 152 crore, year-on-year, YoY.

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Moneycontrol Bureau

Ambuja Cements has reported a 12.5% rise in net profit at Rs 171 crore for the July-September quarter Year-on-Year on the back of higher volumes and increase in prices.

Revenues for the quarter also went up by 15.4% to Rs 1,805 crore versus Rs 1,564 crore in the year-ago period.

During the quarter, the company's cement sales (by volume) increased by 7.6% to 4.69 million tonnes.

Meanwhile, the company's shares declined 1.55% at Rs 152.30 on the Bombay Stock Exchange at 9:30 hours.

The company in a statement said that it is 'cautiously optimistic' about future prospects due to rising cost of raw materials and power and fuel, increasing cost of freight and difficulties in obtaining clearances for land acquisition and mining rights for mineral based infrastructure industries.

During the quarter gone by, Ambuja Cements commissioned one cement mill of 1.1 million tonnes capacity at its unit in Bhatapara.

Meanwhile, appetite for cement in India, the world's second-largest producer after China, has declined in the past one year due to sluggish demand form infrastructure and construction companies due to high interest rates and slowing economic growth.

Simultaneously, a 30% hike in domestic coal prices early this year and an increase in transportation charges due to rising fuel prices have shrunk margins at cement makers across India's 270 million tonnes a year industry.

At the same time, a rise in policy interest rates of 375 basis points since March 2010 has raised the cost of mortgages. That has lead to a slowdown in property sales, thereby cutting cement demand.

Must Read: Cement producers to shift to high cost imported coal: Emkay