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Ambuja Cements, part of the Adani Group, reported a nearly threefold rise in quarterly profit, supported mainly by a significant tax credit and record-high cement sales volumes. The company saw strong demand from infrastructure activity, pushing sales to its highest-ever quarterly level. Revenue also grew modestly during the period. However, rising input costs such as fuel, diesel, and packaging impacted margins. While industry demand showed steady growth during the quarter, analysts expect moderation ahead due to seasonal factors and broader geopolitical concerns affecting cost structures and demand outlook.
Ambuja Cements has reported a strong increase in its quarterly profit, which nearly tripled compared to the same period last year. The growth was mainly supported by a large tax credit and record cement sales volumes. Advertisement
The Adani Group-owned cement manufacturer posted a profit after tax of INR 16.44 billion for the quarter ending March 31, compared to INR 5.55 billion in the corresponding previous period. The company’s performance was strengthened by improved operational volumes and supportive demand conditions.
Cement sales volumes rose by 10% year-on-year to 19.9 million metric tons, marking the highest quarterly sales in the company’s history. This growth was largely driven by strong infrastructure-related demand across the country.
A significant boost to earnings came from a tax credit of around INR 14.6 billion. The company explained that this gain resulted from the reversal of excess tax provisions made in earlier years, following favourable court decisions and a reassessment of tax positions.
Industry-wide cement demand grew by around 6% to 7% during the quarter, supported by ongoing infrastructure spending. However, analysts noted that demand showed signs of moderation towards the end of the period.
On the cost side, Ambuja Cements highlighted pressure from higher fuel, diesel, and packaging expenses. These increases were linked to geopolitical tensions in West Asia and currency fluctuations, which are expected to continue impacting costs in the first half of the current financial year.
Revenue from operations increased by 5.5% to INR 69.72 billion, supported by higher sales volumes and improved pricing conditions.
The company maintained that India’s long-term infrastructure growth outlook remains strong. However, it also indicated that growth expectations for FY27 are softer due to geopolitical uncertainties and forecasts of a below-normal monsoon.
The CEO stated that industry demand is expected to grow at around 5% in FY27. Analysts from Elara Capital also suggested that demand may weaken after the peak construction season, with seasonal softness likely in the coming quarter.
In comparison, larger competitor UltraTech Cement also reported stronger-than-expected quarterly performance recently, supported by favourable demand conditions linked to construction activity.
Source Reuters
5th Jun, 2025
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