ACC Q2 net up 85% on better realisations, yet stock down 2%

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ACC Q2 net up 85% on better realisations, yet stock down 2%

ACC Cement has posted a whopping 85% rise in its net profit at Rs 159.31 crore for the July-Sept quarter of FY12. Sales also grew 30% at Rs 2283.42 crore.

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ACC Cement has posted a whopping 85% rise in its net profit at Rs 159.31 crore for the July-Sept quarter of FY12 Year-on-Year. Sales also grew 30% at Rs 2283.42 crore.

Despite posting good numbers, the company in a statement said that high input cost prevailed during the quarter. "The supply of domestic coal, our principal source of energy, has been grim, affecting cement as well as the power sector. The overall outlook for coal in terms of both availability and pricing is not favourable," said the company in a filing to the Bombay Stock Exchange.

The company further said that a pick-up in demand for cement is likely post monsoon with a similar impact on their despatches in the coming months; though the company does not expect it to be very robust in view of concerns about a slowdown in economic growth. However in the long term we maintain.

Meanwhile, shares of the company were down 1.60% at Rs 1,176.10 on the Bombay Stock Exchange. But the cement major's stock price has risen 28% from the lows of Rs 917 on June 20, 2011 to its current price against a 2.4% fall in the Sensex during the same period. This has been largely due to a robust increase in volumes as well as better realisations.

ACC has registered around 15% growth in volumes to 17.76 million tonnes (mt) during January-September 2011 - translating into an annualised capacity utilisation of 77%. On a comparable basis, during April-September 2011, ACC volumes at 11.56 mt have  marked 15.1% growth annually, compared to 0.2% by its competitor Ultratech and 1% by Ambuja Cement, a group firm.

Simultaneously, realisations have also improved. The increase in cement price (ranging from Rs 25-50 for each 50-kg bag) undertaken by players in southern states have helped ACC post better realisation looking at its good presence in south.

Do read: ACC Q3 PAT seen up 1.3 times at Rs 201 cr