Analysts expect ACC PAT to grow 16% to Rs 380.4 cr
Cement maker ACC is set to declare its numbers today for the quarter ended June 2012. Analysts on an average expect the profit after tax to rise by 16% year-on-year and 2.5 times quarter-on-quarter to Rs 380.4 crore in the quarter.
July 26, 2012 / 11:45 IST
Cement maker ACC is set to declare its numbers today for the quarter ended June 2012. Analysts on an average expect the profit after tax to rise by 16% year-on-year and 2.5 times quarter-on-quarter to Rs 380.4 crore in the quarter.
The company has healthy cash and cash equivalents of approximately Rs 2,200 crore, so higher other income would further boost the PAT, say experts.Net sales are likely to grow by 8.6% YoY to Rs 2,757 crore in the April-June quarter, but analysts expect a drop of 8.6% quarter-on-quarter due to lower sales volumes.EBITDA is seen going up by 16.7% YoY and 3.4% QoQ to Rs 639 crore in the second quarter of calendar year 2012. EBITDA margin too is expected to improve 164 basis points YoY and 270 basis points QoQ to 23.2% in the quarter.In the quarter ended March 2012, profit after tax stood at Rs 151.6 crore due to change in method of depreciation. The company had recognized an additional depreciation of Rs 341 crore due to change of depreciation from straight-line method (SLM) to written down value (WDV). Otherwise profit after tax would have been higher by Rs 231 crore during the quarter and would have stood at Rs 383 crore. Year-on-year sales volume will be lead by higher volumes owing to capacity additions coupled with demand pick upTopline will be aided by higher realizations and dispatches (YoY): ACC’s PAN India presence will aid realizations: Average India prices went up around 9% YoY and 6% QoQ.Sales volume is expected to come in at 6.1mt which indicates a rise 3% YoY but fall of 9% sequentially.ACC's installed capacity currently stands at 30 mtpa, which was driven by 3 mtpa capacity addition due to stabilizing of the new Wadi and Chanda plants.Analysts expect realizations to inch up 6% YoY and 2% QoQ. Margins are expected to expand on better prices and volumes on a YoY basis:ACC imports roughly only 10-15% of their coal requirement and depends more on domestic coal. Hence, ACC will be protected from the rupee depreciation.Fuel costs are likely to remain firm due to higher prices of domestic coal and a depreciating rupee. Higher railway freight is the key cost push factor: In March 2012, railway freight for various commodities was effectively hiked by around 15-20%. ACC has relatively high exposure (50% of volumes) to rail transport.Hike in rail freight costs pushed up operating costs by the entire costs have been passed through.CCI penalty Overhang: Competition Commission (CCI) recently levied penalties on 11 cement companies (including ACC) for engaging in cartelization during FY10/CY09 & FY11/CY10. Cement companies have contested the verdict and filed an appeal with the Competition Appellate Tribunal. Analysts do not any financial impact of the same as ACC’s penalty amount comes to Rs 1,147.6 crore. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
