Ambuja Cements Q1 net down 31% on higher input cost

Moneycontrol Bureau

Ambuja Cements has reported 31 percent year-on-year decline in its June quarter profit to Rs 324 crore on higher input cost. Sales also decline around 9 percent to Rs 324 crore as demand remained weak in certain regions.
EBITDA margins also contracted 700 bps to 21 percent as realisations remained lower.
Shares of the company closed the day at Rs 191.10, down around 3 percent before earnings announcement.
Meanwhile, cement companies are confronted with high freight cost, pricing pressure amid sluggish demand, which is likely to dent sector profitability.
Feedback from cement dealers suggests that in 1Q FY14, pan-India cement prices were down  around 6 percent Y-o-Y. This impacted Ambuja's bottomline, say analysts.
Also, Ambuja has significant exposure to north and west regions and the firm’s market share has been under pressure due to new entrants in its core (west) market. Ambuja has strong presence in West India with around 40 percent dispatches. Ambuja has no presence in South India where demand has been disastrous. Must Read:Ambuja Cements drops 4.5% on Credit Suisse downgrade