Business News/ Markets / Stock Markets/  Ambuja Cements profit up at Rs. 502.4 cr, announces dividend

MUMBAI : Adani Group’s newly acquired cement arm Ambuja Cements, on Tuesday, announced a mere 1.6% rise  in net profit at Rs. 502.4 crore for the March quarter as compared to Rs. 494.4 crore in the corresponding quarter of FY2022.  

For all Ambuja Cements shareholders a dividend of Rs. 2.50 per equity share for the quarter has been announced, as per an exchange filing.   

The company’s profit has been marred by a one-time loss of Rs. 80.71 crore due to a special incentive scheme given by the firm for some key employees, following a change in ownership control (from Swiss parent Holcim to Gujarat-based Adani ). The loss included a one-time cost for employing an information technology transition.   

Ajay Kapur, Whole Time Director & CEO, Ambuja Cements said, “Our focus on operational excellence and cost optimisation measures has yielded improved profitability." 

According to the exchange filing, Ambuja Cement’s revenue recorded a meek 8.4% increase at Rs. 4,256.3 crore during the March quarter as compared to Rs. 3,926.7 crore in the same period of last year.  

“The company's capex strategy has been reviewed," said a footnote on the latest financial disclosure. 

Adani Group, post a damning report by US-based short-seller Hindenburg Research on 24 January, has gone on a debt-prerepayment spree, entailing a review of the group’s strategy and a downward revision in capex plans. 

As a result of the review in Ambuja Cement’s capex strategy, the company has decided to “foreclose some engineering and construction contracts given for ongoing greenfield and brownfield expansion", said the notes to the latest financial accounts.  

The cement-maker said it has recovered 1,815 crore that was given as a milestone payment to an EPC contractor, without penalty, after foreclosing the contract.   

 “With the rise in construction activities across our markets, we see the continuation of the elevated demand and strong volumes in the coming quarters as well," said Kapur. 

“We continue to reduce our carbon footprint by lowering the clinker factor, reducing thermal and electrical energy intensity, implementing Waste Heat Recovery Systems at our plants and increasing our use of and capacity of generating renewable energy. we are confident that our ongoing investments in capacity expansion and sustainability will enable us to achieve our long-term objectives," added Kapur.  

Shares of Ambuja Cements ended 0.53% lower at 394.40 apiece on NSE on Tuesday. 

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Updated: 02 May 2023, 10:01 PM IST
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