Ambuja Cement, which is held by the Adani Group, is going to report its quarterly earnings for the quarter that ends on March 31, 2023. After Adani Group bought Ambuja Cements, the company’s board decided to change the financial year from January 1 to December 31 to April 1 to March 31 starting on September 16, 2022. The most recent earnings will cover 15 months.
Several brokerage companies say that Ambuja Cements’ revenues are likely to grow by only a few percentage points year-on-year (YoY) and quarter-on-quarter (QoQ), while its profit after tax (PAT) is likely to go down year-on-year. EBITDA margins are expected to stay low, dropping between 70 and 280 basis points (bps).
According to Axis Securities, Ambuja Cements would report sales of Rs. 4,137 crore, up 5% YoY, while EBITDA is predicted to be Rs. 804 crore, flat YoY due to pressure on EBITDA margins at 19.4%, down 70 basis points annually. The company may report a profit of about Rs 492 crore, which is about the same as last quarter but 33% higher than the previous quarter.
Axis Securities said that volumes are only likely to grow slightly from one year to the next (YOY) because of a strike at the Himachal plant. On the other hand, revenue is likely to go up because of better realisation from one year to the next. Operating costs will go up year over year, which will have an effect on the gross margin, and the EBITDA margin will go down year over year because of higher costs but higher QoQ. PAT will be slightly lower year-over-year but higher quarter-over-quarter, but EPS will be the same as PAT.
Nirmal Bang Institutional Equities (NBIE) thinks that some cement stocks, like Ambuja Cements, will have an EBITDA/mt of more than Rs1000 because fuel prices have gone down and demand has stayed solid. But it has kept our numbers from being too optimistic.
NBIE says that Ambuja’s income is Rs 4,142.1 crore, which is up 5.5% from last year but the same as the month before. For the March 2023 quarter, EBITDA margins are expected to drop to 12.5%, which is down over 5.5% from the same time last year but up about 20% from the previous quarter. PAT is expected to be Rs 475.5 crore, which is down 4% YoY.
Net sales for HDFC Securities were Rs 4,063 crore, which is up 3.5% year over year but down 1.6% quarter over quarter. It says that Ambuja’s EBITDA is Rs 702.4 crore, which is down over 11% YoY but up 12.2% QoQ. EBITDA margins are expected to drop by 280 basis points year over year, to 17.3%, and net profit may drop by more than 17%, to Rs 408.8 crore.
HDFC Securities has given the stock a “add” rating and thinks that non-south-focused players like Ambuja Cement will report healthy growth of 1% to 2% from quarter to quarter.
Sharekhan by BNP Paribas thinks that Ambuja Cements’ sales will rise by 9.3% YoY and 3.9% QoQ to Rs. 4,288 crore in the Q4F23. It sees its operating profit margins shrink by 200 bps year over year, to 18.1%. It says that Ambuja’s net profit will be Rs. 485 crore, which is a drop of more than 2% from the previous year but a rise of 12.6% from the previous quarter.