Ambuja Cement reports 242% jump in Q3 net profit, but shares sink 5%

JM Financial expects the stock to remain range-bound in the near term.

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26 Aug, 2025 12:21

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Shares of Adani Group-owned Ambuja Cements tumbled sharply in trade on January 30, despite the cement player reporting a sharp three-fold increase in its net profit for the quarter ended December 31, 2024.

Ambuja Cements reported 242 percent increase in standalone net profit at Rs 1,758 crore for the quarter ended December 31, 2024. It reported net profit of Rs 514 crore in the year-ago period.

While volume growth was better at 17 percent YoY, the firm still posted a weak margin performance. Adjusted for the reversal of certain tax provisions, Ambuja Cement's EBITDA declined 50 percent to Rs 890 crore, due to weak realizations and a higher operating expenditure per tonne.

The management highlighted that acquired capacities of Penna and Sanghi are driving volume growth, but given the sub-par utilizations of these capacities and their southern exposure, costs are higher and realizations lower.

The firm's EBITDA per tonne declined to 56 percent to Rs 537, compared to Motilal Oswal's estimates of Rs 848 per tonne.

At 1.52 pm, shares of Ambuja Cements trimmed some losses to quote Rs 505.4, lower by 3.2 percent on the NSE.

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Additionally, the company undertook maintenance shutdowns in 4 kilns, resulting in higher stores & spares expenses reflected in higher other expenses. Finally, since the company sold ~1mn mt of volume in southern region, which was not there in earlier quarter, overall realizations look depressed as southern realizations were lower, noted Centrum Broking.

"Gradual reduction in cost structure and improvement in profitability will be key for stock
performance. Accordingly, we expect the stock to remain range-bound in the near term. We maintain buy given the company’s dominant market position, pan-India presence, and industry-leading volume growth further supported by a strong balance sheet," said JM Financial.

Nuvama Institutional Equities upgraded the stock to buy, from its earlier 'hold' call, with a fresh target price of Rs 676 per share, stating, "The ~9 percent decline in the stock over the last quarter and growth potential have rendered valuations attractive."

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