Ambuja Cements recovers early losses ahead of quarterly earnings

More than 50 percent of Jaypee Group’s cement capacity is located in the central Indian market. (Representative image)

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26 Aug, 2025 12:21

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Shares of Ambuja Cements opened 1.5 percent lower on February 7 but recovered soon after, ahead of its quarterly results which will be announced later today. At 9:27 am, the scrip was up 0.8 percent at Rs 382.55 on the BSE.

According to Kotak Institutional Equities, net profit of the cement manufacturer will witness a jump of 37 percent YoY and 150 percent QoQ to Rs 344.8 crore in the quarter ended December.

Kotak Institutional Equities sees the cement maker reporting a revenue of Rs 4,127.5 crore in the December quarter, up percent 12.5 QoQ and 10.5 percent YoY. In the previous quarter, it had posted a net sales of Rs 3,670.4 crore while in the year ago period, revenue came in at Rs 3,735.1 crore.

Revenue is likely to be higher due to growth in volume and realisation on a YoY basis.

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“We estimate volume of 7.4 mn tons (up 5.7 percent YoY, up 9.8 percent QoQ) during the quarter, factoring in seasonal recovery and a low base. We estimate blended realizations to increase by 2.4 percent QoQ (up 4.5 percent YoY), led by front-ended price hikes during the quarter,” the brokerage firm said. Further, it estimates cement EBITDA/ton (Earnings Before Interest Tax Depreciation and Amortisation per ton) to recover sequentially to Rs 801 per ton, down 1.3 percent YoY, up 77 percent QoQ, led by a combination of higher realisations and lower costs.

Traditionally, the second half of the year is expected to witness strong demand for cement producers as demand revives after the end of the monsoon season.

Institutional demand was more robust led by increasing construction activity in most of the regions as the September quarter had been impacted due to an extended monsoon while construction activity also picked up due to lower commodity prices of building materials, said Axis Securities.

The pre-election spending with the general election approaching in 2024 and higher capital expenditure allocation for the infrastructure sector is likely to boost cement demand going ahead.

IDBI Capital Markets & Securities said that its interaction with cement dealers suggests that the average cement price at all India level has declined by 2 percent MoM (Month on Month) in December 2022.

Axis Securities pointed out cement prices have risen 4-6 percent YoY depending on the region and higher cement prices on a QoQ basis will support operational performance.

“Channel checks suggest that companies are planning to hike prices in the range of Rs 10-Rs 15 in Jan’23. We, therefore, see better pricing trends positively impacting the operating performance of the companies moving ahead,” Axis Securities added.

Historically, in December cement prices go soft and importantly, the decline in December 2022 has come after three consecutive months of price hikes which means the average cement prices have improved by around 2 percent sequentially in the December quarter, the brokerage firm explained.

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Analysts believe that cement demand is likely to further revive in the March quarter on the back of pre-election construction and supported by improved sentiment from the Union Budget.

Input costs:

Higher input costs, particularly fuel prices, has been the major concern for the cement companies over the last 6-9 month as energy price spiked sharply following the Russia-Ukraine crisis, Axis Securities highlighted.

Both domestic and International Petcoke and coal prices have moderated in the last two months despite still hovering at higher levels. “The pet coke prices have moderated by 10-15 percent but imported coal prices continue to remain volatile. Pet Coke and International coal is currently trading at $180 and $300,” the brokerage firm said.

The Adani Group company's EBITDA margin may contract YoY owing to higher cost but is seen expanding sequentially. In the December quarter, operating margin is expected to come at 12.5 percent as compared to 8.3 percent in the September quarter and 15.2 percent a year ago, Axis Securities said.