Ambuja Cement's Q4FY25 profit declines 9% despite sales volume growth

Business Standard

29-04-2025

Adani family-owned Ambuja Cements' consolidated profit (attributable to the owners of the company) for Q4 FY25 declined by 8.98 per cent year-on-year (Y-o-Y) to Rs 956.3 crore, despite an annual sales volume (cement and clinker) growth of 13 per cent. The profit beat the Bloomberg analysts' poll estimate of Rs 735.4 crore.
The company's sales volume in Q4 FY25 grew to 18.7 million tonnes, the highest ever in a quarter across the company's history. The share of premium cement products in the company's trade sales stood at 29.1 per cent, up 5.3 per cent Y-o-Y.
However, the company's revenue from operations for the quarter was up by 11.6 per cent Y-o-Y to Rs 9,802.5 crore. The revenue missed the estimate of Rs 9,903.2 crore.
The company's total expenses for the quarter stood at Rs 8,821.7 crore, up 13.9 per cent Y-o-Y.
Vinod Bahety, whole-time director and chief executive officer of Ambuja Cements, said, 'This year marks a historic milestone in the journey of Ambuja Cements as we cross the 100 mtpa capacity. Additionally, we have ongoing organic expansions at various stages across the country, which will help us achieve 118 mtpa capacity by the end of FY26, a significant step, bringing us closer to our goal of 140 mtpa by 2028.'
Ambuja's operating Ebitda during Q4 FY25 stood at Rs 1,868 crore, up by 9.95 per cent Y-o-Y. Its Ebitda margin, however, declined marginally to 18.9 per cent in Q4 FY25 from 19.1 per cent in Q4 FY24. The Ebitda surpassed the Bloomberg estimate of Rs 1,644.6 crore.
The company's revenue for FY25 stood at Rs 33,697.7 crore, up by 2.71 per cent Y-o-Y. Its profit during the same period increased by 16.64 per cent to Rs 4,167.43 crore. The company's sales volume during the financial year grew by 10.14 per cent Y-o-Y to 65.2 million tonnes.
'Higher volume, along with improved operational parameters, resulted in growth in all business parameters,' the company stated.
Sequentially, the company's revenue increased by 16.5 per cent, but the profit dipped by 54.8 per cent. In Q3 FY25, the company's profit had grown to Rs 2,115 crore amid one-time tax-related reversals and receipt of certain government incentives.
In FY25, agility and change in the fuel basket helped to reduce kiln fuel cost by 14 per cent from Rs 1.84 to Rs 1.58 per Kcal, the company stated. Meanwhile, the logistics costs were reduced by 2 per cent to Rs 1,238 per tonne.
As of Q4 FY25, the company's cash and cash equivalents are at Rs 10,125 crore, with a net worth of Rs 63,811 crore, up by Rs 12,969 crore during the year. The company remains debt-free.
In FY25, the company achieved a cement capacity of 100 mtpa. It aims to achieve 118 mtpa of capacity by FY26 and 140 mtpa by FY28 via organic ways. 'We have also identified nine additional grinding unit projects for which land acquisitions and statutory approvals are under process, which shall enable us to reach 140 million tonnes by FY28,' Bahety said during the company's earnings call on Tuesday (April 29).
Bahety stated that he is seeing a healthy price trend across India so far in FY26, in comparison to Q4 FY25. 'There is a good momentum backed by a buoyancy in the demand in the government capex spending and overall consumption markets of the cement,' he added.
'Based on the demand growth trends observed in H2 FY25, it is projected that cement demand growth in India during FY26 will continue to benefit from the momentum gained by government spending on infrastructure and construction activities and pro-infra and housing Budget. Growth for FY26 is anticipated to range between 7 per cent to 8 per cent,' the company said.
Ambuja's peer UltraTech Cement reported a sales growth of 17 per cent and a profit growth of almost 10 per cent amid improved realisations. Meanwhile, Dalmia Bharat's sales declined by 3 per cent Y-o-Y, but the profit grew by 38.1 per cent amid cost reduction initiatives.
Bahety informed that the company is bidding for coal mines through the auctions conducted by the Government of India to meet the company's requirements as it aims to maximise captive coal consumption. 'A higher share of coal from the captive mines and the opportunistic buying of imported petcoke will help us to reduce our overall basket of fuel and therefore fuel cost,' he added.