Oct 28 (Reuters) - India's Ambuja Cements beat estimates for second-quarter profit on Monday, as higher-than-expected volume growth helped mitigate a decline in cement prices.
The company said its profit after tax fell 22% year-on-year to 5.01 billion rupees ($59.6 million), but came in above analysts' average estimate of 3.57 billion rupees, as per data compiled by LSEG.
Revenue from operations for Ambuja, which is majority owned by billionaire Gautam Adani's ports-to-power eponymous conglomerate, rose 6.1% to 42.13 billion rupees.
Sales volumes for the reported quarter climbed nearly 10%, higher than the 4.4%-8% range forecast by three analysts.
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KEY CONTEXT
Cement prices hit a five-year low of 336 rupees per bag in the September quarter, according to Ambit Capital, due to an industry-wide ramp-up in production to meet medium-term demand expectations, leading to greater supply.
Ambuja, like its Adani-owned peer, still benefited from steady volume sales, further supported by lower prices, in a quarter usually considered weak as monsoons trigger a slowdown in cement demand.
Market leader UltraTech Cement posted its first quarterly revenue drop in four years, but also flagged early signs of price recovery.
Ambuja last week announced its second acquisition of the year, which was the latest of the string of industry-wide deals that has intensified competition.
PEER COMPARISON
|
Valuation (next 12 months) |
Estimates (next 12 months) |
Analysts' sentiment |
|||||||
|
RIC |
PE |
EV/EBITDA |
Revenue growth (%) |
Profit growth (%) |
Mean rating* |
# of analysts |
Stock to price target** |
Div yield (%) |
|
|
Ambuja Cements |
(ABUJ.NS) |
29.48 |
15.30 |
15.43 |
25.82 |
Buy |
27 |
0.82 |
0.36 |
|
ACC |
(ACC.NS) |
18.95 |
10.46 |
6.81 |
10.35 |
Buy |
18 |
0.82 |
0.34 |
|
UltraTech Cement |
(ULTC.NS) |
36.61 |
20.60 |
10.65 |
20.76 |
Buy |
35 |
0.93 |
0.64 |
|
Shree Cement |
(SHCM.NS) |
39.17 |
17.23 |
7.82 |
7.11 |
Hold |
16 |
0.93 |
0.42 |
* 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
JULY-SEPTEMBER STOCK PERFORMANCE
-- All data from LSEG IBES
-- $1 = 84.0480 Indian rupees)
Reporting by Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips
Source: Reuters