ACC may post double-digit profit growth in Q1 driving on cement price hike

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26 Aug, 2025 12:21

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Cement company ACC is expected to announce a double-digit growth in March quarter profit on April 23, driven by strong operating income and an increase in cement prices.

Brokerages expect Q1 profit growth in the range of 20-44 percent compared to year-ago period. The company follows January-December as its financial year.

ICICI Securities sees 20 percent growth in profitability while Edelweiss and Motilal Oswal expect the growth at 40 percent and 44 percent YoY, respectively.

"Slowing cost inflation and improving realisations would lead to 12.7 percent growth in EBITDA to Rs 673 per tonne. Consequently, PAT would grow 20.6 percent YoY to Rs 302 crore," ICICI Securities said.

Motilal Oswal said EBITDA is estimated at Rs 839 per tonne (+Rs 159 QoQ), led by Rs 129 QoQ increase in blended realisation and Rs 30 QoQ decrease in cost. PAT is likely to increase 44 percent YoY, it added.

The growth in EBITDA is likely to be supported by higher realisations, lower fuel and other costs.

Cement volume of the company is expected to grow in the range of 5-8 percent YoY in Q1 led by strong traction from rural housing schemes and demand from the affordable housing segment.

Kotak said it expects 8 percent YoY growth in volume to 7.7 million tonne, whereas Motilal Oswal expects dispatches to grow 7 percent YoY led by growth in underlying markets.

Cement prices have increased in all regions. In the South, where the company has almost 30 percent of exposure, cement prices have increased around 5 percent. In the East and West regions, where the company has 40 percent exposure, prices have increased 1 percent sequentially.

Considering price hike across regions, brokerages expect realisation to increase 1.5-2 percent QoQ and around 3 percent YoY.

"Aided by higher cement prices and increased contribution of premium products, we expect a 3.7 percent growth in realisations to Rs 5,190 per tonne YoY," ICICI Securities said.

Kotak said, "We estimate realisations to increase 2 percent QoQ (+3 percent YoY) led by 1-5 percent QoQ increase in cement prices in the company's key markets in South, Central and East regions."

For the March quarter, revenues are expected to increase in the range of 7-12 percent YoY. Kotak as well as Motilal Oswal expect topline to grow nearly 12 percent YoY each. Prabhudas Lilladher and Antique see over 7 percent YoY.

"Capacity utilisation of the company is above 85 percent and thus considering the growth in cement demand in upcoming quarters, the company is expanding its capacities," Narnolia said.

ACC is setting up a greenfield unit in Katni (MP), with a clinker capacity of 3MT and a grinding capacity of 1MT and 1.6MT split grinding unit in Tikaria (UP). These new capacities are expected to have 20 percent lower operational cost, the brokerage said.

Key issues to watch out for would be cement pricing sustainability, volume growth and update on capacity expansion plans.