"The earnings for the second quarter should be close to Rs 65 crore ($14.92 million), which is about a 120 per cent jump over the previous period," said V Ramanan, director for research at BNP Prime Peregrine.

Gujarat Ambuja, the country's most profitable cement company, unveils its results on Thursday.

Cement prices in the company's major markets in the western state of Gujarat and in northern India have improved over the second quarter of last year, analysts said.

Ramanan said prices in the Gujarat region, which accounts for 40 to 45 per cent of the firm's sales, had improved by 10 to 12 per cent.

"Realisations are up in the main markets and Gujarat Ambuja has not been affected by the sharp price decline in the eastern region," said R Srinivasan, analyst with Inquire Indian Equity Research.

Competition has driven prices down 25 to 30 per cent in the east, where Gujarat Ambuja does not have a direct presence. Some analysts cautioned the profit growth could be hurt by lower volumes and rising costs.

"Volumes were down in November and December and costs of power, fuel and transportation are slightly higher," said Manish Srivastava, analyst with SSKI Securities.

He estimated second quarter net profit would rise to Rs 37 crore, 26 per cent higher than the previous period.

The firm's cement sales dropped to 524,000 tonnes in December 1999 compared to 557,000 in the same month of last year. November sales totalled 508,414 tonnes compared to 523,120 tonnes in the same period the previous year. Gujarat Ambuja had surprised the market with a stellar year-on-year 194 per cent profit growth in the first quarter of 1999-2000.

The firm had said then operational efficiencies and cost reductions had helped operating margins. It will, however, have higher fuel costs after India increased the retail price of diesel by about a third in October, analysts said.

Gujarat Ambuja moved towards consolidating its position in the cement industry with two acquisitions in December but analysts said the interest costs burden was likely to be reflected only in the next quarter.

The company bought a 7.2 per cent stake in the Associated Cement Companies (ACC) paying Rs 455 crore, or Rs 370 per share, from the Tata group-the founders of ACC. It also made a Rs 350 crore acquisition of loss-making DLF Cements Ltd. Gujarat Ambuja shares were up Rs 4 at Rs 292 on the Bombay Stock Exchange in Wednesday afternoon trade.