Cement major ACC is expected to degrow in the quarter ended June. Profit is likely to fall 11 percent year-on-year to Rs 217 crore and total income may drop 2 percent to Rs 3,012 crore, according to a CNBC-TV18 poll.
The company follows January-December as its financial year.
Analysts expect cement volumes to decline in April-June quarter (following weakness in past two consecutive quarters) due to poor sales seen in Southern and Northern markets.
The topline of ACC, which has pan India presence, may be dragged by lower volumes but realisations and RMC may support. Analysts see poor realisations in northern and western regions.
Southern presence may help realisations as cement prices jumped 15 percent Y-o-Y.
Ready mix concrete (RMC) business may support topline. RMC business clocked revenue of Rs 439 crore in Q1CY15 and Rs 305 crore in Q2CY14.
During the quarter, operating profit is seen declining 16 percent to Rs 378 crore and margin may fall 230 basis points to 12.5 percent compared to corresponding quarter of last fiscal.
The hit in margin may be due to weak pricing environment in the country besides South India. Most of its coal received from Coal India, so there is no benefit of lower international coal pices. Higher railway freight cost may also impact margin.
Key issues to watch out for would be cement pricing recovery, volume growth & demand revival, update on Jamul expansion & cost saving measures, and clarity on sustained resumption of operations at plants in the east.
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