Shares of Ambuja Cements shed over 5 percent on Friday after the company reported a weak performance in the December quarter. The company on Thursday reported a 55.48 percent decline in its consolidated net profit at ₹430.97 crore for the December quarter as against a profit of ₹968.24 crore in the year-ago quarter.
It follows January-December as its financial year.
The stock lost as much as 5.4 percent to its day's low of ₹339.70 per share. In the last 1 year, the stock has risen 25 percent as against a 12 percent rise in the Sensex.
Its revenue from operations in Q4 jumped a minor 2.31 percent to ₹7,625.28 crore compared to ₹7,452.87 crore in the year-ago period. Meanwhile, its margin contracted 660 bps YoY to 15.2 percent on account of higher fuel prices and flat realisations.
The firm’s consolidated result also includes the financial performance of its step-down firm ACC Ltd.
On a standalone basis, its net profit fell 49.37 percent to ₹251.66 crore versus ₹497.10 crore in the year-ago period and standalone revenue from operations rose 6.25 percent to ₹3,735.12 crore in the October-December quarter as against ₹3,515.11 crore a year ago.
Post the earnings, the management noted that the firm's December 2021 quarter was unfavourably impacted by a steep escalation in fuel prices coupled with subdued demand in multiple regions
Going ahead, the company said economic activity continues to see improvement due to upbeat business confidence. The recently announced Union Budget focuses on growth led by a substantial increase in the capex (capital expenditure) for the infrastructure sector, it added.
“Cement demand growth is expected to remain positive backed by increased demand for housing combined with the government’s thrust on infrastructure development,” the company said.
For the year 2021, Ambuja Cements’ consolidated net profit jumped 19.44 percent to ₹3,711.04 crore, against ₹3,106.84 crore a year ago. Its consolidated revenue from operations increased 18.14 percent to ₹28,965.46 crore in 2021. It was ₹24,516.17 crore in 2020.