Ambuja Cements Q3 Results FY2023, Net profit at Rs. 488 crores

On 7th February,  Ambuja Cements announced its results for the third quarter of FY2023.

Key Highlights:

- Net Revenue was up by 11% QoQ at Rs. 8,036 Crores in line with volumes. 
- EBITDA rose by 161% at Rs. 1,138 Crores. EBITDA margin expanded from 6.2% to 14.6%. 
- Cost reduced by Rs. 283 PMT and expected to further reduce cost optimization and leveraging synergies from adjacency businesses of the group. 
- Treasury Income up by Rs. 42 Crores QoQ.
- PAT rose to Rs. 488 Crores as compared to Rs. 51 Crores last quarter

Business Highlights:

- Robust Volume growth of 7% QoQ, supported by an increase in blended cement (clinker factor reduced from 60.1% to 59.5%), better route planning, and higher operational synergies with its subsidiary, ACC. Market leadership is strongly maintained across key markets. 
- Kiln fuel cost was reduced by 14% from Rs. 2.84 per ‘000 Kcal to 2.45 per ’000 KCal with a change in coal basket, and group synergies on coal procurement. Fuel cost to be further optimized in the future. 
- Warehouse infrastructure also optimized. Direct sales improved from 44% to 50%, the lead distance was reduced from 263 km to 248 km, and higher dispatches through rail. These measures are expected to further reduce logistics costs. 
- WHRS projects at Bhatapara, Rauri, and Suli have been partially commissioned and will achieve a full capacity of 39 MW by Q4FY23. Marwar 14 MW has been fully commissioned. WHRS projects at Ambujanagar and Maratha 28 MW are under implementation.

Commenting on the results, Mr. Ajay Kapur, CEO of Ambuja Cements said: “During the quarter, the cement sector saw higher production & capacity utilization on account of pickup in demand. The Company has maintained a healthy top line and leadership position in its core markets with a stronger Ambuja & ACC product portfolio. EBITDA margins expanded due to a relentless focus on reduction in fuel and logistics costs by leveraging synergies with Group Companies. Business initiatives are expected to further bring down the operating costs, reduce clinker factor, reduce logistics cost, improve sales of blended cement, and expand EBITDA margin. We expect cement demand to further grow in coming quarters on the back of increased infrastructure activities given the sharp focus on infrastructure capex in this Budget. 
The Company remains debt free with a healthy position of Cash & Cash Equivalents, which augurs very well for its journey to achieve scale and market leadership. Our focus is to ramp up capacity in an efficient way to ensure to be one of the lowest cost producers is on track. Ametha Integrated Unit is set to be commissioned by July 2023, which will increase Kiln capacity by 3.3 MTPA (EC approvals in hand for 2.75 MTPA) & 1 MTPA Grinding Unit. We are making good progress on our planned WHRS installation target.”