Margins under pressure, Q1 nos may be hit: ACC

The ACC (Associated Cement Company) management says that their margins are under tremendous pressure and the Q1 numbers are likely to be hit due to freeze on prices. The company is uncertain about future on account of squeeze in the margin.

Sumit Bannerjee, MD of ACC said, "We see more pressures building on the margins because the cost will relentlessly be going up in logistics and coal, particularly because you would have by then used up your old stocks of coal which is lagging your inventory at earlier prices. On the other hand, the price situation in terms of regulatory restrictions is not amenable to increase in prices and we have already committed to the government that we will be freezing our prices for the next two-three months."

He adds further, "Possibility of increase in prices after three months will fully depend on the market situation at that point of time. Depending on the demand we will have at that time, which is rainy season and although in the last two years the demand has been maintained, we will have to wait and watch whether the demand is maintained in this rainy season and that will determine whether we can as ACC pass on our cost increases to the customers."