India’s Ambuja Cements Ltd, owned by the embattled Adani Group, reported a 46% jump in quarterly profit on Tuesday as fuel costs fell and demand rose, and said its parent was considering engaging independent agencies to handle compliance.

The management of Adani group entities is considering appointing independent firms to “look into the issues and compliance of applicable laws and regulations, related party transactions, internal controls etc,” Ambuja said.

Ambuja is one of several Adani group companies caught in the eye of a storm since Jan. 24 when U.S.-based short-seller Hindenburg Research raised concerns on the conglomerate’s debt levels and use of tax havens, allegations the group has denied.

The company’s standalone profit after tax rose to 3.69 billion rupees ($44.6 million) in the three months ended Dec. 31, from 2.53 billion rupees in the year-ago quarter.

Ambuja said it maximised low-cost domestic sources of coal as its own coal mine, Gare Palma, expanded and that it did not import any petcoke from the United States.

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The Mumbai-based company’s standalone revenue from operations rose to 10.4% to 41.29 billion rupees, with sales volume increasing 7% to 13.7 million tonnes per annum.

“During the quarter, the cement sector saw higher production and capacity utilisation on account of a pickup in demand,” Chief Executive Ajay Kapur said.

Ambuja’s EBITDA (earnings before interest, taxes, depreciation, and amortization) margins expanded from 6.2% to 14.6%, while kiln fuel cost fell 14% in the quarter.

“EBITDA margins expanded due to relentless focus on reduction in fuel and logistics costs by leveraging synergies with group companies,” Kapur said.

“Business initiatives are expected to further bring down operating cost, reduce clinker factor, reduce logistics cost, improve sales of blended cement and expand EBITDA margin,” he said, adding Ambuja remained debt-free.

Last month, rival Ultratech Cement reported a 38% fall in its December-quarter profit as expenses surged.

Ambuja’s shares closed up 1.13% after the results were announced. They have fallen ~23% since the Hindenburg report.


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