Ambuja Cements Q4 preview: Here's what to expect from Adani Group's cement firm

Ambuja Cements Ltd, another cement player from Gautam Adani's conglomerate, is set to announce its earnings for the quarter and financial year ended on March 31, 2024 on May 1. The brokerage firms have a mixed view on the expected earnings but they expect that soft cement prices will dent its performance in the quarter.

The analysts said the company may report a double digit growth in top line on a year-on-year (YoY) basis, while it may grow quarter-on-quarter (QoQ) basis. Ebitda may remain largely flat, with some contraction in Ebitda/tonne. Ebitda margins may also contract sequentially by 100-140 basis points (bps). Brokerages have a mixed view on the bottomline, seen in the range of Rs 500-700 crore.

Kotak Institutional Equities sees revenue of Ambuja Cements may come in at Rs 4,798.4 crore, up 12.7 per cent YoY and 8.1 per cent QoQ, while Ebitda may fall 2 per cent QoQ to Rs 835.9 crore with Ebitda margins contracting 176 bps sequentially to 17.4 per cent. Ambuja may report a net profit of Rs 697 crore, rising to 36 per cent YoY.

"We factor in volumes of 9.3 million tons during the quarter with strong growth in key markets and ramp-up of Sanghi capacity. We estimate blended realizations to be down 4.9 per cent QoQ on account of price cuts during the quarter. We expect costs/ton to decline by 2.8 per cent QoQ mainly led by operating leverage on a sequential basis. We expect Ebitda /ton to fall to Rs 897," it said.

Sharekhan sees Ambuja Cements' revenue of Rs 4,728 crore in Q4FY24, up 11.1 per cent YoY and 6.5 per cent QoQ, while its net profit may grow 20.9 per cent QoQ and 6.5 per cent YoY to Rs 621 crore. However, the brokerage sees operating margin falling 33 bps sequentially to 18.5 per cent. "We expect volume growth of 10-14 per cent YoY for Ambuja Cements," said Sharekhan.

Phillip Capital expects Ambuja Cements to report a revenue of Rs 4,860.8 crore, up 13 per cent YoY and 8 per cent QoQ, while Ebitda is seen at Rs 841.4 crore, marginally down on a sequential basis but up 7 per cent YoY. Ebitda margins may fall to 18 per cent, while net profit may drop 14 per cent YoY to 503 crore.

Volume growth seen at 13 per cent YoY and 12 per cent QoQ, said Phillip Capital, which expects realisations seen flat YoY and dipping 3 per cent QoQ. Ebita per tonne may fall to Rs 919 for the quarter.

Axis Securities' pegs revenues for Ambuja Cement at Rs 4,631 crore, up 4 per cent QoQ and 9 per cent YoY. The company may report an Ebitda of 952 crore, up 12 per cent QoQ with Ebitda margins rising 140 bps sequentially to 20.6 per cent. Its net profit is seen at Rs 563 crore, up 10 per cent QoQ and 12 per cent YOY.

"Axis sees Ebitda/tonne rise 10% YoY to Rs 1,068, owing to lower cost. Volume to grow YoY driven by positive demand, driving the revenue. Ebitda margin to expand YoY owing to easing cost pressure. Realization to be lower YoY & QoQ AS Cement prices declines. Cost/Tonne to be lower YoY," said Axis Securities.

Pan-India average cement prices saw a 2.5-3 per cent monthly dip in March 24, owing to a financial year-end volume push. The industry has witnessed the fifth consecutive month of price decline, said Emkay Global. "We expect cement demand moderation in Q1FY25 due to the upcoming general elections. Thus, the extent of price hikes/sustainability remains a key monitorable," it said, keeping Ambuja as its top picks.