Ambuja Cement on Friday reported its quarterly earnings for the July to September period, during which its margin and net profit missed CNBC-TV18 poll estimates and came in lower due to a steep rise in global energy prices, the company said.

The cement maker’s standalone revenue for the sector stood at Rs 3,670 crore as against Rs 3,539 crore projected by the CNBC-TV18 poll of analysts. This implies a 13.4 percent jump from Rs 3,237 crore in the same quarter of the last fiscal.

However, Ambuja Cement’s net profit at Rs 138 crore for the September quarter, 37 percent lower than Rs 219 crore estimated by analysts. On a year-on-year basis, the profit suffered a massive 68 percent fall from Rs 441 crore.

Margin shrunk to 8.3 percent for the quarter as against poll expectations of 12.3 percent. This compares to 21.7 percent in the same quarter of the previous financial year.

Like its peers Shree Cement, UltraTech Cement and others, Ambuja Cement’s margin squeezed following a jump in input costs. The cement maker noted that power and fuel costs during the period rose 83 percent year-on-year to Rs.1,415 crore versus Rs 771.4 crore in the corresponding quarter a year ago. Other expenses jumped 25 percent to Rs 663 crore, the firm said in an exchange filing.

The cement maker cited a steep rise in global energy prices and the decline in freight cost per ton due to increased synergy and efficiency gain as the reason for missing margin projections.

Ajay Kapur, CEO Ambuja Cements said, "Cement industry has been facing significant margin pressure resulting from steep rise in global energy prices. However, the recent cooling off in energy prices and post-monsoon demand pick-up appears like silver lining for coming quarters.”

The company also cited the expense towards special incentives for certain key employees pursuant to a change in the ownership and control for an exceptional loss of Rs 15 crore for the quarter and nine months ended September 30, 2022.

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Meanwhile, Ambuja Cement’s sales volume for the quarter rose by 12 percent to 6.7 metric tonne versus 6.0 MT in the year-ago quarter. The CNBC-TV18 poll had pegged the number at Rs 6.8 mt.

Following the financial results, the company’s management said that it is looking at increasing capacity from the current 67.5 MTPA to 140 MTPA over the next five years.

CEO Kapur said that the firm wants to take advantage of the scope and resources of the Adani Group to gain leadership position in the cement industry.

"With the equity infusion by the promoter group in the company, the expansion program will gather pace in the coming time. Considering the promise, we made to double our manufacturing capacity over the next five years, our growth plans are ambitious and this will be evident in 2023. While cost pressures have not gone away, our growth plans remain strong."

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(Edited by : Abhishek Jha)