Ambuja Cements, Nuvoco Vistas gain up to 6% on heavy volumes; here's why

Shares of state-owned construction & engineering company NBCC (India), meanwhile, soared 13 per cent to Rs 39 on the BSE

Shares of cement & cement product companies -- Ambuja Cements and Nuvoco Vistas Corporation -- gained up to 6 per cent on the BSE in Friday's intra-day trade amid heavy volumes.

In the past one month, these stocks have corrected 11 per cent and 33 per cent, respectively, after reporting weak set of numbers for the quarter ended December 2021 (Q3FY22). In comparison, the S&P BSE Sensex was down 3 per cent during the same period.

Shares of Nuvoco Vistas Corporation, for instance, was up 6 per cent at Rs 316 on the BSE. A combined 5.41 million shares, representing 1.5 per cent of total equity of the company, had changed hands on the NSE and BSE till 11:22 am.

The stock had hit a record low of Rs 294.55 on Thursday, February 24, 2022. Moreover, it has corrected 49 per cent from its 52-week high level of Rs 577.50 on September 6, 2021. The company had made stock market debut on August 23, 2021 by issuing shares at price of Rs 570 per share.

For Q3FY22, the company reported consolidated loss of Rs 86 crore due to lower revenue. It had posted consolidated profit of Rs 44 crore in Q3FY21. Revenue from operations declined 3 per cent year-on-year (YoY) to Rs 2,165 crore as against Rs 2,231 crore in the corresponding quarter of the previous fiscal year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins also contracted 1,000 bps to 11 per cent from 21 per cent in Q3FY21.

However, it expects Q4FY22 to witness strong demand recovery amid potential clinker shortage resulting in opportunity to correct prices. Nuvoco is poised to exploit the market growth, as Q4 is seasonally stronger quarter with robust demand drivers. The aggressive price hikes in key markets are expected to offset input cost increase and see higher incentive from Jojobera volumes.

Meanwhile, shares of Ambuja Cements were up 3 per cent to Rs 315.90 on the BSE in the intra-day trade today. Trading volumes on the counter jumped four-fold with a combined 2.3 million shares having changed hands on the NSE and BSE till the time of writing of this report.

The company reported a weak operational performance for December quarter (Q4) with margin contraction of 651 bps quarter-on-quarter (QoQ) and 660 bps YoY to 15.2 per cent on account of higher fuel prices and flat realisations.

EBITDA declined 26 per cent YoY at Rs 568 crore impacted by unprecedented increase of fuel prices. Revenues were up 6.3 per cent YoY to Rs 3,735 crore. Profit after tax was down 36.2 per cent YoY, 28 per cent QoQ to Rs 317.4 crore mainly due to lower operating performance and exceptional charge of Rs 65.7 crore due to restructuring.

The management said the December 2021 quarter was unfavorably impacted by steep escalation in fuel prices coupled with subdued demand in multiple regions.

Meanwhile, the state-owned construction & engineering company, NBCC (India) soared 13 per cent to Rs 39 on the BSE on the back of two-fold jump in trading volumes. A combined around 12 million shares, representing nearly 1 per cent stake of the company, had changed hands on the NSE and BSE. The stock had hit a 52-week low of Rs 34.20 on Thursday.