Ambuja Cements Ltd. (500425.BY) Thursday posted a 17% increase in net profit for the October-December period as sales volume grew and product prices rose.

The unit of Swiss cement maker Holcim Ltd. (HOLN.VX) posted a net profit of INR3.02 billion in the fiscal fourth quarter--up from INR2.58 billion a year earlier--to match the average of estimates in a Dow Jones Newswires poll of 10 analysts.

Sales rose 30% to INR23.39 billion from INR17.88 billion.

While the company didn't give any details of a rise in prices and sales, brokerage firm Edelweiss Securities said in a note that Ambuja's sales volume likely grew 10% from a year earlier in the fourth quarter, while ICICI Securities said average product prices in the past quarter climbed 20% from a year earlier to INR4,249 a ton.

Indian cement companies had a stellar October-December quarter, as sales volume rose after construction activity picked up pace post the end of seasonal monsoon rain in September. However, companies are facing pressure on their margins because of high cost of fuel and raw materials.

On its full-year performance, Ambuja said cement sales volume grew 4.5% to 20.91 million tons.

Operating profit only grew 2% in 2011 despite higher sales, because of a sharp increase in raw material prices.

The company said the price of its main raw material, clinker, and transportation costs rose 20% each in 2011, while fuel costs grew 18%.

Ambuja said that the company expects pressure on its profit margin due to rising cost of fuel, transportation and raw materials. It added that product prices would remain volatile in the short term.

On the brighter side, the company said that infrastructure spending in the country would help increase cement demand in 2012.

- By Prasenjit Bhattacharya, Dow Jones Newswires; 91-11-4356-3358; prasenjit.bhattacharya@dowjones.com