ACC Q2 results: Net profit falls 49% to Rs 200 crore hit by low cement prices, rising costs

ACC Q2 net profit declined 49 percent to Rs 200 crore.

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Adani Group's cement unit ACC Ltd on October 24 reported a 49 percent fall in its consolidate net profit at Rs 200 crore in September 2024 quarter, amid  near-decade-low prices and continued demand inertia from multiple sectors . The cement maker had reported a net profit of Rs 387.88 crore during the July-September period of preceding 2023-24 fiscal, the comapny said in an exchange filing.

ACC Ltd is one of India’s largest cement and building materials company and part of the diversified Adani Group. Its revenue from operations was reported at Rs 4,613.52 crore in the September quarter of the current fiscal, up from Rs 4,434.73 crore in the year ago period, driven by higher trade sales volume and premium products.

The company's trade sales were up 2 per cent in the quarter and  share of premium products in the total trade sales increased to 36 per cent, indicating that a larger portion of these sales were from higher-margin premium products. Trade sales refer to sales made through the company's distribution network, which typically includes direct sales to retailers, dealers, or end customers in the market.

During the quarter under review, the company's expenses increased to 8 per cent to Rs 4,452.73 crore as cost of raw material surged by Rs 123 crore.  With cement price hikes failing to stick in the market, analysts had flagged  margin pressure to persist as input costs continue to rise.  On the contrary, power and fuel costs decreased by about Rs 193 crore as kiln fuel cost reduced by 15 per cent.

ACC's operating EBITDA (Earnings Before Interest Taxes,, Depreciation and Amoratization) declined to Rs 436 from Rs 549 crore while its margins fell  to 9.5 per cent from 12.4 per cent. The cement maker remains optimistic about demand and expects cement consumption to grow by 4-5% in FY 2025, driven by steady infrastructure development and housing projects.

"Overall, industry expects improvement in demand in H2 FY 2025, which is likely to be driven by post monsoon pickup in construction and housing activity. Government’s continued focus on infrastructure development - roads, highways, railways, and metros – will continue to remain as the key demand driver, " the company said in a statement.

ACC Ltd shares traded under pressure in Thursday's trade down by 1.53 percent to quote at Rs 2,222.25 per share on the NSE.

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