(Reuters) – India’s Ambuja Cements posted a jump in third-quarter profit on Wednesday, as higher-than-anticipated volume growth helped cushion the impact from lacklustre cement prices.
Ambuja’s revenue rose 9.7% in the quarter ended Dec. 31, topping analysts’ average estimate. The company also noted that the cement sector is expected to grow by 4%-5% in the fiscal year ending March 2025.
The Adani-owned company recorded a one-time tax gain of 8.25 billion rupees in the reported quarter. Despite this, profit before tax climbed 59% to 10.84 billion rupees ($125.2 million).
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KEY CONTEXT
A boost in cement volumes helped Ambuja join Adani-owned peer ACC and larger rival UltraTech in reporting upbeat results in a seasonally sluggish quarter, while lacklustre pricing dampened earnings of smaller players in the sector.
Analysts believe cement volumes of UltraTech and the Adani Group likely benefited from market share gains, supported by their ongoing dealmaking rivalry.
Ambuja’s standalone volumes jumped 23%, exceeding the 8.5%-15% growth range anticipated by analysts from four brokerages.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Ambuja Cements 39.92 15.22 18.65 30.78 Buy 31 0.84 0.37
ACC 17.28 9.61 8.44 23.49 Buy 18 0.78 0.37
UltraTech Cement 37.24 20.12 16.28 34.50 Buy 37 0.91 0.62
Shree Cement 50.42 18.96 8.26 20.79 Hold 17 1.00 0.40
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
— All data from LSEG IBES
— $1 = 86.5575 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips)
