Breaking Records: Ambuja Cements’ Stellar Financial Year
Newzdaddy Business Updates
Standalone and Consolidated Financial Triumphs
In a remarkable feat, Ambuja Cements has achieved its highest-ever annualized Profit After Tax (PAT), reaching Rs 4,738 Crores, marking a staggering 119% increase year-on-year. The Operating EBITDA for FY’24 surged by an impressive 73%, soaring to Rs 6,400 Crores. Notably, the Q4 Operating EBITDA witnessed a robust 37% YoY growth, reaching Rs 1,699 Crores. Bolstering its financial strength, Ambuja boasts a healthy Cash & Cash equivalent reserve of Rs. 24,338 Crores.
Promoter Confidence and Strategic Investments
Underscoring its commitment to growth, the promoter group of Ambuja Cements subscribed fully to warrants, infusing a substantial Rs 20,000 Crores into the company. Of this, Rs. 8,339 Crores were received in April ’24, bolstering the company’s Cash & Cash equivalent reserves. Additionally, Ambuja completed three strategic acquisitions – Sanghi, Asian Cements, and GU in Tuticorin – resulting in an 11.4 MTPA increase in cement capacity, totaling 78.9 MTPA. Further expansion plans include the targeted commencement of 4 MTPA Clinkering and 4.8 MTPA Cement capacity in Q4 FY ‘25.
Operational Triumphs and Market Dominance
Ambuja Cements achieved its highest Clinker and Cement sales in the past 20 quarters, underscoring its dominance in the market. Notable operational highlights include a 17% YoY increase in Q4 EBITDA PMT, reaching Rs 1,026/t, and a significant 8.1% growth in annual sales volume to 59.2 Mn Tons.
A Message from Mr. Ajay Kapur
Reflecting on the stellar performance, Mr. Ajay Kapur, Whole Time Director & CEO of Ambuja Cements, emphasized the resilience and adaptability of the business model. He reiterated the company’s commitment to delivering long-term value and sustainable growth amidst global economic challenges. The growth blueprint implemented in the previous year, focusing on capacity-building through organic and inorganic means, operational efficiency, and decarbonization measures, is yielding remarkable results.
Healthy Operational Metrics
Key Performance Indicators (KPIs) such as volumes, efficiencies, costs, and capex have shown robust improvements, reaffirming Ambuja’s cost leadership. Noteworthy achievements include a 17% reduction in Kiln fuel cost (Consolidated) and an increase in WHRS as a percentage of total power consumption.
Renewable Energy Initiatives
With a focus on sustainability, Ambuja is making significant strides in renewable energy. Out of its 1 GW renewable power target, 200 MW of solar power is set to be operational by May ’24, with green power share expected to improve to ~30%. This initiative is anticipated to result in cost savings and EBITDA improvement.
Cost Optimization and EBITDA Visibility
Ambuja has optimized its fuel basket, improved coal materialization, and enhanced synergies with group companies, resulting in a 17% reduction in Kiln fuel cost. Better visibility of fuel costs, coupled with domestic coal linkage and imported shipments, mitigates volatility and provides high EBITDA visibility. Ambuja’s strategic focus on branding and technical support services is expected to yield higher volumes and expanded margins, further strengthening its market position.
Volume Expansion and Profitability Growth
Volume expansion, coupled with improved operational parameters, has led to growth across all financial metrics. Notably, EBITDA PMT has grown by Rs 149 (17% YoY), with a margin expansion of 3.5 PP.
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Robust Cash Flows and Net Worth
Ambuja generated a total of Rs. 1,945 Crores in cash flows from operations in Q4, and Rs. 5,646 Crores in FY 24. Net worth increased by Rs 8,022 Crores during the quarter, standing at an impressive Rs 50,846 Crores. The company remains debt-free and maintains Crisil AAA (stable) / Crisil A1+ ratings.
Dividend Policy and Growth Plans
In light of ongoing capex and growth plans, the Board of Directors has recommended a dividend on equity shares at Rs. 2.00 per share, consistent with the previous year on an annualized basis.
Green Power Projects and Emission Reduction
With green power projects on track, Ambuja aims to optimize power costs with 60% sourced from green power, maximizing EBITDA and reducing CO2 footprint. Additionally, green cement comprises over 80% of the product mix, showcasing a commitment to eco-friendly practices and CO2 footprint minimization.
Social Impact and Environmental Stewardship
Ambuja and ACC have created societal value for over 4.6 million people by contributing to healthcare, education, employment, and sustainable livelihoods. Achievements include 11x water positivity for Ambuja Cement and 8x plastic negativity through the co-processing of plastic waste in cement kilns. Ambuja has also pledged to plant 8.3 million trees by 2030, aligning with Adani Group’s ambitious plan to plant 100 million trees.
Brand Campaigns and Collaborations
Ambuja launched its brand film, ‘Mazbooti Ki Misaal’, championing its legacy of ‘Giant Strength’, which was digitally amplified across various platforms. The company strategically partnered with the Gujarat Giants team as a title sponsor of the Ultimate Kho-Kho League, further enhancing its brand presence.
Consumer Engagement and Support Services
The launch of Ambuja Help, a consumer-centric website, provides step-by-step guides and resources, enhancing the customer experience and engagement.
Ambuja’s Future Prospects
The cement industry’s outlook remains positive, driven by pre-election spending, government emphasis on infrastructure development, and sustained real estate activity. With its accelerated growth plans, cost leadership, and synergy with group businesses, Adani Cement is poised to sustain its market leadership position.
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