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Ambuja Cement: A Quarter of Double-Digit Volume Growth - Views on News from Equitymaster

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  • Nov 9, 2017 - Ambuja Cement: A Quarter of Double-Digit Volume Growth

Ambuja Cement: A Quarter of Double-Digit Volume Growth

Nov 9, 2017

Ambuja Cement has announced its results for the third quarter of the calendar year 2017 (3QCY17). During the quarter ended September 2017, the company's topline grew by 15.1% YoY and net profits grew by 10% YoY. Here is our analysis of the results:

Performance summary
  • On a standalone basis, net sales during the quarter reported double-digit growth of 15.1% YoY.
  • The growth in the topline was contributed by increased volumes. Cement sales volumes increased 11.6% YoY from 4.50 million tonnes in 3QCY16 to 5.02 million tonnes in 3QCY17.
  • Operating profit was higher by 15.1% YoY. Operating profit margins stood at 15.3% in 3QCY17, same as those seen in 3QCY16.
  • Other income reported a drop of 11.8% YoY.
  • Finance costs stood at Rs 313 million during the quarter, reporting a sharp increase of 58% YoY.
  • Depreciation charges declined by 11.8% YoY.
  • Tax expenses were higher by 15.3% YoY during the quarter.
  • Despite the rise in finance costs and tax expenses, increased realisations and the rise in sales volumes helped the company to grow its net profits by 10% YoY. Net profit margin decreased from 12.3% in 3QCY16 to 11.7% in 3QCY17.

    Standalone financial performance snapshot
    (Rs m) 3QCY16 3QCY17 Change 9MCY16 9MCY17 Change
    Net sales 20,149 23,196 15.1% 79,712 85,023 6.7%
    Expenditure 17,068 19,653 15.1% 66,135 71,028 7.4%
    Operating profit (EBITDA) 3,080 3,544 15.1% 13,576 13,995 3.1%
    EBITDA margin 15.3% 15.3%   17.0% 16.5%  
    Other income 1736 1,531 -11.8% 4690 3,110 -33.7%
    Depreciation 1,592 1,403 -11.8% 6,929 4,302 -37.9%
    Finance costs 198 313 58.0% 598 855  
    Profit before tax 3,026 3,359 11.0% 10,740 11,949 11.3%
    Tax 551 635 15.3% 3,210 2,837 -11.6%
    Effective tax rate 18.2% 18.9%   29.9% 23.7%  
    Profit after tax 2,476 2,724 10.0% 7,530 9,112 21.0%
    PAT margin 12.3% 11.7%   9.4% 10.7%  
    No of shares (m)         1,985.6  
    Diluted EPS (Rs)*         5.5  
    P/E (times)         49.4  

    *trailing twelve months earnings

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