Gujarat Ambuja to buy back shares

Mumbai: Gujarat Ambuja Cements has decided to implement a buyback programme, which will amount to 10 per cent of its paid-up capital and 3 per cent of its net worth.

The company, with a net worth of Rs 1,600 crore, has decided to buy shares worth Rs 50 crore at a price of Rs 170 each. Though companies are allowed to buy back shares up to 10 per cent of the net worth, Gujarat Ambuja has decided to limit its buyback to 3 per cent. The company has done well in the first quarter ended 30 September 2001 by posting a 112-per cent rise in net profits at Rs 53.23 crore, in comparison to the Rs 25.06 crore in the corresponding period last year. Revenues rose 17.20 per cent to Rs 340.08 crore in comparison to Rs 290.26 crore in the corresponding period last year.

The huge jump in net profit came about on the back of the 13.80-per cent increase in volumes, reduction in interest outgoings and besides other cost-cutting measures. Interest outgoings were down 23.40 per cent to Rs 24.67 crore, in comparison to the Rs 32.22 crore, largely due to the company having paid off its high cost debts. Gujarat Ambuja is planning to increase its capacity by 6 million tonnes, which will effectively raise the total capacity to 13 million tonnes. The company expects the demand for cement to grow by 8 to 9 per cent in the current year. In the first half ended 30 September, the demand for cement grew 5.20 per cent to 49.40 million tonnes despite a sluggishness between April and July. The demand is said to be better in August and September.