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Ambuja Cements: CY07 results - Views on News from Equitymaster

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Ambuja Cements: CY07 results

Feb 2, 2008

Performance summary
  • On account of robust demand and favourable pricing scenario, Ambuja Cements reported strong numbers for CY07. Backed by a favourable pricing scenario and higher volumes, the company has reported topline growth of 18% YoY. For the full year, the company witnessed a 5% YoY growth in despatches, while realisations improved by almost 12% YoY.

  • The operating profits of the company reported 20% YoY growth. The rising cost of operation continues to exert pressure on operating profits especially in terms of power and fuel cost and freight and forwarding charges.

  • As mentioned earlier, better prices and favourable demand-supply scenario has resulted in healthy topline growth during the year. This, when combined with higher other income and exceptional items (the company has realised exceptional gains to the tune of Rs 82 m from the sale of its share in associate company and disposal of property) has helped Ambuja Cements rake in a superior bottomline growth of 32% YoY in CY07.

Financial performance snapshot
(Rs m) CY06** CY07
Net sales 62,683 57,048
Expenditure 41,352 28,739
Operating profit (EBITDA) 21,331 28,310
EBITDA margin 34.0% 49.6%
Other income 1,137 1,935
Interest 790 759
Depreciation 3,261 2,363
Profit before tax/(loss) 18,416 27,123
Tax 3,384 9,433
Net profit 15,033 17,691
Net profit margin 24.0% 31.0%
No of shares (m) 1,517 1522
Diluted EPS (Rs)*   11.6
P/E (times)   10.2
*Trailing twelve month earnings
** The company has not published CY06 12 month numbers. Hence, the numbers given here under pertain to 18-month period. The same are not strictly comparable.

What to expect?
While we do not doubt the growth prospects, we have reservations with respect to current valuations of the stock, which is trading at over US$ 150 per tonne. This is expensive, and as such, we advise investors to practice caution.

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