Adani Group's cement company, Ambuja Cements, has released its Q1 results for FY 2025-26. The company has demonstrated robust performance in the June quarter. Consolidated net profit for this quarter surged by 24 percent to reach ₹970 crore, compared to ₹783 crore in the same quarter last year. This impressive growth has surprised investors.
Significant Surge in Revenue
Ambuja Cements' operating revenue also remained b this quarter. The company recorded a revenue of ₹10,244 crore, which is 23.50 percent higher than the first quarter of the previous year. In the corresponding quarter last year, the company's revenue was ₹8,292 crore.
Increase in Earnings per Ton
The company's EBITDA per metric ton (EBITDA PMT) increased by 28 percent this quarter, reaching ₹1,069. This indicates that the company has improved its operations and maintained good control over production costs.
53 Percent Increase in EBITDA
The company reported that its EBITDA (earnings before interest, tax, depreciation, and amortization) for this quarter stood at ₹1,961 crore. This is the highest quarterly EBITDA in Ambuja Cement's history, marking a year-on-year increase of 53 percent. Additionally, the EBITDA margin saw a 3.8 percentage point increase, reaching 19.1 percent.
EPS and Debt Status
The company stated that its earnings per share (EPS) in the first quarter was ₹3.20, which is 22 percent higher than the same quarter last year. Another significant point is that the company remains completely debt-free. In a market where many companies are burdened with heavy debt, Ambuja's position is a reassuring piece of news for investors.
Preparing to Expand Cement Production Capacity
The company informed that its current cement production capacity is 104.5 million tons per annum. Ambuja plans to increase this to 118 million tons per annum by March 2026, and the company is actively engaged in the necessary preparations.
Impact of Decline Seen in the Stock Market
However, despite the company's impressive results, the stock market's response was not as positive. On Thursday, July 31, the day the company's results were announced, its shares saw a decline of 4.52 percent. At the close of the market, the company's shares were trading at ₹590.35, while the previous closing price was ₹618.30.
Intraday Volatility
On Thursday, Ambuja Cement's stock opened at ₹614.95 and reached a high of ₹624.50 during the day, but later saw a decline due to profit-booking. The 52-week high for the company's shares is ₹686.50, and the low is ₹452.90.
No Significant Change in Market Cap
The company's current market cap remains around ₹1,45,410.49 crore. Despite the decline in shares, the b financial performance and the company's long-term plans are reassuring for investors.
Trend May Change in the Coming Sessions
However, considering the company's b quarterly results, market experts anticipate that the stock may show a positive trend on Friday, the last trading day of the week. Typically, investor sentiment improves after b financial performance, and buying may return to the stock.
Focus on Company's Strategy
Ambuja Cements' strategy is now clear: increasing production capacity, reducing costs, emphasizing green energy, and remaining debt-free. The company is consistently performing well on all four fronts.
Why Did the Company's Performance Put Pressure on the Stock?
While the results were outstanding, the decline in shares may also indicate that the market had already anticipated good results. Consequently, some investors booked profits after the results were announced. Additionally, weak global market sentiment and volatility in the domestic market may also be contributing factors.
