MUMBAI: Double-digit growth in cement demand helped Ambuja Cements post a 27% growth in quarterly profit. The company, owned by global cement major Holcim, said in its outlook that the pricing pressure has begun to appear in certain markets, particularly in the southern and central regions, and may persist into 2010. The recent hike in domestic coal prices will also put additional pressure on operating margins, said the company.
It has posted net profit of Rs 318 crore in the September quarter, compared with Rs 250 crore in year-ago period. The net sales jumped 16% to Rs 1,611 crore.
Fuel and power costs also reduced during the quarter, as the higher cost imported coal acquired in 2008 has now been fully consumed, the company said.
AL Kapur, managing director, Ambuja Cements said, “Cement demand should remain robust in the December quarter. However, export markets may remain depressed. There are early signs of a recovery in the urban housing market.”
Export markets particularly the Gulf region become very weak. This results in volumes being diverted to some extent into the domestic market, the company said in a statement.
Sectoral analysts said that central and eastern regions were particularly strong, while the southern region witnessed a sharp slowdown in the last quarter. The main drivers of the strong demand have been increased spending on infrastructure projects, and the delayed monsoon.
On the BSE, Ambuja Cements closed down 2.01% to Rs 87.68 on Wednesday.
Source : The Economic Times