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BL Research Bureau

ACC has reported a muted set of numbers for the June quarter, due to several factors including the Gujjar agitation and input cost pressures, amidst a marginal 4 per cent increase in cement prices. For the quarter, ACC’s consolidated sales volumes declined by 1.3 per cent to 5.29 million tonnes.

The company’s standalone sales turnover was lower by over 2 per cent. The operating profit margin of the company was down by 5 percentage points to 25.97 per cent. With higher taxes, the after-tax profits too were down by 4 percentage points.

The agitations in Northern States to an extent hampered the company’s dispatches during the quarter. Besides, rising input costs also played a spoilsport, with fuel costs higher by 41 per cent and the company’s input costs were up by 24 per cent for the quarter.

Cement prices in the Northern and Eastern regions were at about Rs 240 per bag, recording a marginal rise compared with the last quarter. These regions witnessed lower demand overall, due to heavy rains in the East and agitations in the North.

Expansion Plans

Though ACC’s capex is in progress at Bargarh (Orissa), New Wadi (Karnataka) and Chanda (Maharashtra), completion is a long way off (2010). These projects will take the company’s total capacity to 30.4 million tonnes.

The company is also taking initiatives on waste management and wind power generation, with a wind power plant in Rajasthan being installed at a cost of Rs 55 crore. With cement prices unlikely to rise sharply and capacity additions a long way away, the medium-term outlook for ACC may hinge largely on traction in demand in the Northern and Eastern markets.

With one-off factors impacting volumes in the June quarter, the current numbers do not provide any cues on how the demand scenario will pan out.

More Stories on : Stocks | Cement | Associated Cement Companies Ltd

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