- Revenue: INR8,894 crores, a jump of 12% YoY.
- Operational Cost: INR4,345 per ton, a decline of 9%.
- Energy Costs: Declined by 13% to INR1,219 per tonne.
- Transportation Cost: Declined by 8% to INR1,280 per ton.
- EBITDA: INR1,699 crores, a growth of 37%.
- EBITDA per Ton: INR1,026, a growth of 17%.
- EBITDA Margin: Expanded by 3.5% to 19.1%.
- Cash and Cash Equivalents: INR15,999 crores as of March 31, 2024; INR24,338 crores including warrant money received in April.
- Full Year Revenue: INR33,160 crores, up 7% YoY.
- Full Year EBITDA: INR6,400 crores, up 73% YoY.
- Full Year EBITDA per Ton: INR1,081, up 60% YoY.
- Full Year EBITDA Margin: Expanded by 7.4% to 19.3%.
- Promoter Stake: Increased by 3.6% to 70.3%.
- Capacity Expansion: Increased by 17% to 78.9 million tonnes; targeting 140 million tonnes by FY28.
- Clinker and Cement Sales: Highest-ever for the last 20 quarters in Q4 FY24.
- Waste Heat Recovery System (WHRS) Capacity: Increased to 134 megawatts; targeting 186 megawatts by March 2025.
- Green Power: 60% of power requirement to be met through green power by FY28.
- Coal Mines: Secured 3 mines catering to 50% of current requirement; targeting 80-90% through captive sources in 12 months.
- Freight and Forwarding Costs: Reduced by 8% to INR1,280 per tonne.
- Limestone Reserves: Total reserves reaching 7.8 billion tonnes.
- Net Worth: Approximately INR60,000 crores including warrant money.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ambuja Cements Ltd (BOM:500425, Financial) achieved the highest-ever clinker and cement sales for the last 20 quarters in Q4 FY24.
- The company reported a 12% year-over-year increase in revenue, driven by a strong focus on micro market management and expansion of the dealer network.
- Operational costs per ton declined by 9%, with significant reductions in energy and transportation costs.
- EBITDA grew by 37% year-over-year, with EBITDA per ton increasing by 17% and margins expanding by 3.5% to 19.1%.
- The company remains debt-free and has a strong cash position, with consolidated cash and cash equivalents standing at INR 24,338 crores as of April 2024.
Negative Points
- Despite the positive financial performance, the company faces uncertainties related to future developments and market conditions.
- There are concerns about the timely execution of the clinker expansion plans, as environmental clearances are still awaited for some projects.
- The company's strategy to achieve a 20% market share by FY28 may require high teens growth in sales volume, which could be challenging in a competitive market.
- The integration and stabilization of newly acquired assets, such as the grinding unit at Tuticorin and Sanghi Industries, may take time and resources.
- The company's cost reduction targets, including a INR 500 per ton reduction by FY28, are ambitious and depend on successful execution of various initiatives.
Q & A Highlights
Q: Can you provide more details on the capacity expansion plan, particularly regarding clinker expansion?
A: We are ready to place orders for three new clinker lines, one in the West, one in the North, and one in the South, pending environmental clearances (EC). These lines will add 12 million tonnes of clinker capacity, which can produce over 20 million tonnes of cement. Our target is to reach 82 million tonnes of clinker capacity by FY28, with 80% of this being brownfield expansions.
Q: What is the overall game plan for Sanghi Industries following the recent fund-raising announcement?
A: Sanghi has a strategic location and fits well within our West-South corridor. We plan to refurbish the existing kilns to run at full capacity by H2 FY25 and add two more kilns of 4 million tonnes each in the future. The recent fund-raising is aimed at improving Sanghi's financial structure and achieving a higher credit rating.
Q: How do you see the cement industry's pricing and margin trends given the focus on cost-saving initiatives?
A: While cost-saving initiatives will drive margin expansion, we believe cement prices should remain stable or improve due to strong demand. Our focus on premium products and brand strength helps us avoid commodity price wars.
Q: Can you break down the expected INR500 per tonne cost reduction by FY28?
A: The cost reduction will come from several areas: coal mines, long-term procurement agreements, investments in railway wagons, and green energy initiatives. Specifically, power costs will decrease by INR150 per tonne due to green energy investments, and logistics costs will see a 10-15% reduction through footprint optimization and digital initiatives.
Q: What is the strategy for utilizing Sanghi's clinker and cement production?
A: Sanghi's clinker will be used in our new grinding units, including the recently acquired Tuticorin unit. We also plan to use Sanghi clinker for our grinding stations in Gujarat and other facilities, ensuring efficient utilization and cost optimization.
Q: How do you plan to achieve the target of 20% market share by FY28?
A: We have a clear plan to increase our capacity to 140 million tonnes by FY28. Our strong dealer network, brand strength, and strategic capacity additions in undersupplied regions will help us achieve this target without disrupting market prices.
Q: What is the status of the coal blocks you have won, and how will they impact your fuel costs?
A: The coal blocks we have won are of high quality and suitable for our kilns. These blocks will significantly reduce our fuel costs, as we will secure 80-90% of our coal requirements from captive sources within the next 12 months.
Q: Can you elaborate on the logistics strategy, particularly the mix of road, rail, and sea transportation?
A: Currently, 27% of our transportation is by rail. We expect this to remain stable as volumes grow. Sea transportation will increase, especially with the improved infrastructure at Sanghi, allowing us to handle larger vessels and optimize costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
