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Ambuja Cem: Profits hit by lower cement prices - Views on News from Equitymaster
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Ambuja Cem: Profits hit by lower cement prices
Nov 3, 2015

Ambuja Cements has announced its results for the third quarter of the calendar year 2015. During the quarter, the company's sales and net profit decreased by 4.2% YoY and 35.8% YoY respectively. Here is our analysis of the results:

Performance summary

  • On a standalone basis, net sales decreased by 4.2% during the quarter on account of lower cement realisations.
  • Operating profits decreased by 22.3% YoY; operating margins contracted from 17.3% in 3QCY14 to 14.1% in 3QCY15.
  • While other income declined, depreciation charges and finance costs witnessed a substantial surge.
  • As such, net profit during the quarter decreased by 35.8% YoY; net profit margin contracted from 10.9% in 3QCY14 to 7.3% in 3QCY15.
  • During the first nine months of the calendar year 2015, sales and profit decreased by 6.9% YoY and 40.3% YoY respectively.

Standalone financial performance snapshot

(Rs m) 3QCY14 3QCY15 Change 9MCY14 9MCY15 Change
Net sales 21,876 20,952 -4.2% 75,317 70,125 -6.9%
Expenditure 18,087 18,007 -0.4% 60,031 58,783 -2.1%
Operating profit (EBITDA) 3,789 2,944 -22.3% 15,287 11,342 -25.8%
EBITDA margin 17.3% 14.1%   20.3% 16.2%  
Other income 1030 898 -12.8% 3982 3,446 -13.5%
Depreciation 1,302 1,553 19.3% 3,740 4,615 23.4%
Finance costs 179 207 16.1% 542 737 35.9%
Profit before tax & exceptional items 3,339 2,082 -37.6% 14,986 9,436 -37.0%
Exceptional gain/ (loss) - -   - -  
Profit before tax 3,339 2,082 -37.6% 14,986 9,436 -37.0%
Tax 949 547 -42.4% 3,308 2,460 -25.6%
Effective tax rate 28.4% 26.2%   22.1% 26.1%  
Profit after tax 2,391 1,536 -35.8% 11,678 6,976 -40.3%
PAT margin 10.9% 7.3%   15.5% 9.9%  
No of shares (m)       1,548.5 1,551.9  
Diluted EPS (Rs)*         6.6  
P/E (times)         31.8  

*trailing twelve month earnings

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