India's Ambuja Cements Q1 profit falls less-than-expected

A view shows Ambuja Cement bags, to be carried to a construction site, in a load carrier in Ahmedabad·Reuters
Reuters
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BENGALURU (Reuters) - India's Ambuja Cements reported a smaller than expected fall in its first-quarter profit on Wednesday, as a tight lid on costs helped offset weak demand.

The Adani group-company's profit after tax slipped 12% to 5.71 billion rupees ($68.2 million) in the three months ended June 30, but stayed above analysts' average estimate of 5.06 billion rupees, according to LSEG data.

Revenue fell 4.5% to 45.16 billion rupees. Analysts had expected revenue to rise marginally.

Ambuja's sales volumes rose 2.2% in the quarter, falling short of the 3%-6% volume growth projected by analysts.

Total expenses rose 2.5% on year.

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KEY CONTEXT

Cement makers have been increasing the share of clean power sources in their fuel mix in a bid to reduce spending and boost their bottomlines.

During the June quarter, general elections and a heat wave hurt construction activities, impacting cement sales.

Companies have also been forced to cut prices to stave off rising competition, with prices hovering near more than three-year lows from April to June.

Larger peer UltraTech Cement reported first-quarter earnings below estimates while rival Ramco Cements posted a larger-than-feared profit slide.

Another Adani group-owned cement firm, ACC, also missed first-quarter profit view.

PEER COMPARISON

Valuation (next Estimates (next 12 Analysts' sentiment

12 months) months)

RIC PE EV/EBITD Revenue Profit Mean # of Stock to Div

A growth (%) growth (%) rating* analyst price yield

s target** (%)

Ambuja Cements Ltd 45.79 18.77 10.77 30.01 BUY 22 1.02 0.29

ACC Ltd 20.79 11.93 7.22 8.62 BUY 18 0.92 0.29

UltraTech Cement Ltd 37.11 21.06 9.68 19.90 BUY 34 1.00 0.60

Shree Cement Ltd 35.92 17.78 8.80 14.19 BUY 16 0.97 0.38

* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

APRIL-JUNE STOCK PERFORMANCE

-- All data from LSEG IBES

-- $1 = 83.7100 Indian rupees

(Reporting by Hritam Mukherjee in Bengaluru; Editing by Mrigank Dhaniwala)