April 29, 2024
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ACC Q4 net profit rises over 210% to Rs 749 crore, declares Rs 7.50 dividend
Cement manufacturer ACC Ltd on April 25 reported a 216 percent rise in standalone net profit for the March quarter at Rs 749 crore as against Rs 237 crore in the year-ago period, on a standalone basis.
Its revenue came in at Rs 5,398 crore on a standalone basis, up 13 percent from a year ago.
On a consolidated basis, net profit rose 300 percent to Rs 945 crore in the quarter, compared to Rs 236 in the same quarter last year. Consolidated revenue from operations rose to Rs 5,409 crore from Rs 4,791 crore recorded last year.
The Adani Group company declared dividend of Rs 7.50 per equity share of face value of Rs 10. At 1450 hours on April 25, ACC’s shares were trading nearly 1% higher at Rs 2,575.2 apiece.
ACC said its consolidated EBIT was at Rs 721 crore for the quarter against Rs 411 crore in the same quarter last year. EBIT margin also improved from 8.6% percent in Q4 FY23 to 13.3% percent in Q4FY24.
“Outlook for cement industry remains positive based on higher budgetary allocation to infrastructure and construction and government’s push for affordable housing along with green energy transition, demand-supply dynamics, and greater consolidation,” the company said in a statement.
Cement volume growth recovered to a healthy 7-8 percent on-year in the last quarter of fiscal 2024, on aggressive volume push, after growing ~15 percent on-year in the first half and logging a moderate slowdown in the third quarter due to regional hindrances, markets analytics firm Crisil said in its sector report on April 23.
Cement sales have benefitted from increased government spending on infrastructure, rural development and rising demand from the housing sector. However, analysts said that factors such as stocking in March, labour shortage due to Holi and Lok Sabha elections may impact cement demand in April.
Although, companies in various regions have announced price hikes ranging from Rs 10-15 per bag in the north to Rs 40 per bag in the central and east, dealers are cautious about whether the announced price hikes will hold, analysts said.
Competition for market share at the cost of pricing
The war for market share in the cement industry is heating up and analysts expect that the big boys of the cement industry will continue to take over smaller companies and consolidate to protect and gain market share.
However, they flag that the heightened ambitions of the major players may lead to price wars even as new capacities are added, hurting margins.
Against the trend of firm pricing in the early months of the fourth quarter (and a price drop in March due to the yearend volume push), January and February did not see sustained price hikes this year, highlighting the elevated competitive intensity in the market, Crisil said in its report.
Aggressive volume push at the expense of pricing resulted in a ~6 percent sequential decline in cement prices to Rs 370-375 on average per 50 kg bag in the fourth quarter, with exit prices in March at Rs 360-362 per bag, the report added.
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