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Oct 18, 2012, 11.13 AM IST
Cement producer ACC is set to declare its results on Thursday for the three months ended September 2012. Analysts on an average expects the company's profit after tax to grow by 68.2 percent to Rs 268 crore from Rs 159.3 crore in a year ago period.
Net sales are seen going up by 9.6 percent to Rs 2,502 crore from Rs 2,283.4 crore during the same period.
Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to go up by 63.6 percent year-on-year to Rs 457 crore in the third quarter of calendar year 2012. EBITDA margin is likely to be at 18.3 percent in the September quarter versus 9.55 percent in a year ago period and 22.28 percent in the previous quarter.
EBITDA margin appears much lower as other operating income was much higher in the third quarter of previous year:
In Q3CY11, out of the total other operating income of Rs 99 crore, Rs 61.7 crore was from incentive and sales tax written back. So if we remove this Rs 61.7 crore, then EBITDA margin would stand at the 12.2 percent.
EBITDA margin calculation = EBIT + depreciation - other operating income (which was unusually higher).
On quarter-on-quarter basis, however, net sales are seen going down by 14.3 percent and profit after tax by 35.3 percent. EBITDA too is expected to fall by 29.7%.
Investors should watch out for some clarification (if any) with respect to reports which suggest Holcium has been demanding royalty of 2% of revenue for technology support from the company.
Analysts see topline will be hurt by lower sales volumes but will be easily offset by higher cement prices on a YoY basis:
Sales volume is expected to decline by 4.2% YoY and stood at 5.45 million tonnes despite the benefit of a delayed monsoon.
Lower volume is primarily due to higher exposure to South region of the country (25%).
On the flip-side, ACC's PAN India presence will aid realizations that are likely to grow 13% YoY.
Cement prices remained largely stable across regions during July and August but were down in September due to picked up in monsoon. Cement Prices have not seen the traditional decline during the monsoon quarter due to delayed monsoons.
Margins will decline sequentially due to lower operating leverage and slight impact from diesel price hike. ACC also has relatively high exposure (50% of volumes) to rail transport.
Cost is expected to rise due to higher coal prices by Coal India and higher railway freights. The company procures more than 80% of its coal requirement from Coal India. ACC imports a mere 10-15% on coal from overseas.
May 21 2013, 13:56
- in Results Boardroom
May 21 2013, 11:05
- in MARKET OUTLOOK