Ambuja Cements is trading lower by 2.2% at Rs 161 after reporting 23% year-on-year (y-o-y) drop in its net profit at Rs 312 crore for the first quarter ended March 2012 due to an additional depreciation charge of Rs 289 crore and rising operation costs. Sales, however, increased 19% to Rs 2,213 crore y-o-y basis.
Holcim group cement maker has changed its policy on providing depreciation on captive plants from ‘Straight Line' to ‘Written Down Value' with retrospective effect. Under the straight-line method, depreciation is charged on the original cost of goods, while in ‘written-down' it is charged on depreciated value of the goods.
Power and fuel cost jumped by 30% at Rs 627 crore, while cost of materials consumed increased 28% at Rs 186 crore on y-o-y basis during the recently concluded quarter.
“In spite of improved realization, cost push from higher energy cost and rail freight increase is expected to keep the profit margin under pressure," Ambuja Cements said in a future outlook note.
A combined around 95,000 shares have changed hands on the counter in opening deals on both the exchanges.