Ambuja Cements: Higher costs offset gains from rising volumes

Future volume growth, profitability improvement in rising costs environment key to instil confidence

Ambuja Cements' performance for the quarter ending March 2017 was no different from its subsidiary, ACC. While sales volumes improved, the pressure of rising costs was well evident.

The company said that production costs were impacted on account of higher pet coke and imported coal prices. Sourcing of fly ash from longer leads (distances) and an increase in diesel prices led to higher freight costs. This impact was partly offset by cost reduction initiatives and lower gypsum cost. Thus, operating Ebitda for the quarter at Rs 394 crore came lower against Rs 452 crore in the corresponding quarter last year.