More Stories

Informist, Monday, Jan. 27, 2025

By Sunil Raghu

AHMEDABAD – ACC Ltd.'s consolidated revenue and net profit for the quarter ended December got a boost from rise in government grants over the year and reversal of interest charged by tax authorities, which it recognised as earnings in Oct-Dec. The consolidated revenue from operations for the quarter rose 7.3% on year to INR 52.07 billion and net profit surged 103.1% on year to INR 10.92 billion. Analysts had expected a 0.8% on-year rise in consolidated revenue to INR 49.54 billion and a net profit of INR 3.44 billion.

ACC received government grants of INR 7.20 billion during the year, which is recognised on its books in Oct-Dec, compared to INR 591.40 million a year ago. In its earnings filing to stock exchanges, the company said it is eligible for various incentives from government authorities under multiple schemes, government incentives and grants, including tax credits and refunds. The company also reversed and recognised a past tax liability of INR 5.30 billion as credit in the books as other income for Oct-Dec.

For the nine months ended December, the company clocked a consolidated net profit of INR 16.51 billion on revenue of INR 147.97 billion. In Apr-Dec period of 2023-24, the company's consolidated net profit was INR 13.92 billion on revenue of INR 143.64 billion.

In Jul-Sept, multiple external factors like unseasonal rains, softer cement prices, and delay in allocation of funds for infrastructure projects in the immediate aftermath of general elections in the country saw cement companies languish. The Oct-Dec quarter was expected to be pivotal for cement demand. Analysts believe the sector was in for a gradual recovery in the second half of 2024-25 (Apr-Mar), as construction activity generally picks up post monsoons. They expected a resumption in infrastructure projects, improved weather conditions, and a rebound in trade and non-trade to revive demand for cement.

In its earnings statement for Oct-Dec, ACC said it now expects cement demand to rebound in Jan-Apr, as construction activity accelerates in the infrastructure and housing segments. The sector saw modest growth of 1.5-2.0% in Apr-Sept and is projected to grow at 4-5% in FY25.

There was a major gap amongst polled analysts on expected cement sales volumes for ACC. Some expected a modest rise of 5-8%, while others expected ACC's cement volumes to fall by up to 11% on year. However, ACC's sales volume of cement and clinker rose to 10.7 million tonnes in Oct-Dec from 8.9 million tonnes in the same period a year ago. This is the company's highest-ever volume in any quarter, ACC said in the statement.

For Apr-Dec, sales volume of cement and clinker was 30.3 million tonnes, up 14.8% from 26.4 million tonnes in the same period last year. The sales volume of ready mix concrete in Oct-Dec was up 7.6% on year at 0.71 million cubic metres. However, for nine months Apr-Dec, it was down 3.4% to 2.0 million tonnes, from 2.07 million tonnes in Apr-Dec 2023-24.

The company's Oct-Dec operating earnings before interest, tax, depreciation and amortisation, or EBITDA, was INR 11.16 billion, compared to INR 9.05 billion a year ago. The average estimate by 11 analysts had pegged ACC's EBITDA at INR 6.2 billion, ranging from INR 5.5 billion to INR 6.9 billion. The Oct-Dec operating EBITDA per tonne stood at INR 1,038, compared to INR 1,017 in Oct-Dec of 2023-24. The operating EBITDA margin for the December quarter was 18.8% versus 18.4% a year ago.

As on Dec. 31, 2024, the company's cash and cash equivalent stood at INR 25.26 billion.

Over the last decade, the company generally has not seen negative revenue growth in Oct-Dec, except in the year 2016, when it saw a 7.4% on-year fall. This is also after two successive quarters that the company has seen its net profit rise on year. Before that, for two consecutive quarters of Apr-Jun and Jul-Sept, it saw net profit fall by 22.83% and 48.52% on year respectively.

The company's other income for Oct-Dec jumped up 652.5% on year to INR 6.48 billion.

In the December quarter, ACC's power and fuel costs were down 16% on year at INR 8.53 billion. The freight and forwarding expenses rose 7.5% to INR 10.27 billion, while other expenses were up 20.44% on year at INR 5.40 billion. Power and fuel costs and freight expenses are two major input costs for cement companies.

The cost of materials consumed in Oct-Dec was INR 10.09 billion, up 24.3% on year. In Oct-Dec, total expenditure, including finance costs, and depreciation and amortisation costs, was INR 50.99 billion, compared with INR 42.79 billion a year ago. In Oct-Dec, the cement company's employee benefit expenses rose 10.8% on year to INR 1.97 billion, while its cost due to change in inventories of finished goods, work-in-progress and stock-in-trade was INR 589.4 million, compared to a gain of INR 767.8 million a year ago.

Finance cost fell 16.9% to INR 281.9 million. Tax outgo for the December quarter more than doubled on year to INR 3.85 billion. On the National Stock Exchange, shares of ACC followed the broader market and closed 3.1% lower at INR 1,995.40.  End

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.