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Ambuja Cem: Lower realisation impact margins - Views on News from Equitymaster
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Ambuja Cem: Lower realisation impact margins
Feb 18, 2016

Ambuja Cements has announced its results for the fourth quarter of the calendar year 2015. During the quarter, the company's sales and profit before tax decreased by 1.0% YoY and 19.7% YoY respectively. Here is our analysis of the results:

Performance summary

  • On a standalone basis, net sales decreased by 1.0% during the quarter on account of lower cement realisations.
  • Operating profits decreased by 8.5% YoY; operating margins contracted from 14.0% in 4QCY14 to 12.9% in 4QCY15.
  • Depreciation charges and finance costs witnessed a substantial surge.
  • Profit before tax declined by 19.7% YoY.
  • During the full calendar year 2015, sales and profit decreased by 5.5% YoY and 46.0% YoY respectively.

Standalone financial performance snapshot

(Rs m) 4QCY14 4QCY15 Change CY14 CY15 Change
Net sales 23,790 23,558 -1.0% 99,107 93,683 -5.5%
Expenditure 20,466 20,516 0.2% 80,497 79,299 -1.5%
Operating profit (EBITDA) 3,324 3,042 -8.5% 18,610 14,384 -22.7%
EBITDA margin 14.0% 12.9%   18.8% 15.4%  
Other income 983 1,067 8.6% 4964 4,513 -9.1%
Depreciation 1,355 1,641 21.1% 5,095 6,257 22.8%
Finance costs 103 181 76.5% 645 918 42.4%
Profit before tax & exceptional items 2,848 2,287 -19.7% 17,834 11,722 -34.3%
Exceptional gain/ (loss) - -   - -  
Profit before tax 2,848 2,287 -19.7% 17,834 11,722 -34.3%
Tax (438) 1,187 NA 2,871 3,647 27.0%
Effective tax rate NA 51.9%   16.1% 31.1%  
Profit after tax 3,286 1,100 -66.5% 14,964 8,076 -46.0%
PAT margin 13.8% 4.7%   15.1% 8.6%  
No of shares (m)       1,549.7 1,552.0  
Diluted EPS (Rs)*         5.2  
P/E (times)         37.1  

*trailing twelve month earnings

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