ACC Limited stands as a prominent player in the Indian cement industry. Founded in 1936, the company has built a strong reputation for quality and innovation. With a commitment to sustainability, ACC consistently invests in eco-friendly practices.
Today, ACC offers a wide range of cement products, catering to various construction needs. The company focuses on enhancing customer satisfaction through superior service and reliable delivery. Furthermore, ACC prioritizes technological advancements to improve production efficiency. As a result, it contributes to building a sustainable future while supporting infrastructure development across India. With a rich history and a forward-looking approach, ACC Limited continues to shape the construction landscape in the country.
Share Price
ACC Ltd shares fell 2.24 percent on Thursday, trading at Rs 2,216.25 a share on the NSE. The stock touched an intraday low of Rs 2187.55 a piece. The stock closed at Rs 2270.2 on 24th October 2024.
Q2 Results
Adani Group’s cement unit, ACC Ltd, reported a 49 percent drop in consolidated net profit, totaling Rs 200 crore for the September 2024 quarter. This decline occurred amid near-decade-low prices and persistent demand challenges across various sectors. In the same July-September period of the previous fiscal year, the company had posted a net profit of Rs 387.88 crore, according to an exchange filing.
ACC’s revenue from operations reached Rs 4,613.52 crore in the September quarter, up from Rs 4,434.73 crore a year earlier, fueled by increased trade sales volume and higher-margin premium products. The company saw a 2 percent rise in trade sales, with premium products making up 36 percent of total sales, indicating a shift towards more profitable offerings.
Meanwhile, expenses rose by 8 percent to Rs 4,452.73 crore due to a Rs 123 crore increase in raw material costs. Analysts pointed out that the pressure on margins would likely continue, as cement price hikes struggled to gain traction. However, power and fuel costs decreased by about Rs 193 crore, thanks to a 15 percent drop in kiln fuel costs. ACC’s operating EBITDA fell to Rs 436 crore from Rs 549 crore, leading to a reduction in margins from 12.4 percent to 9.5 percent. Despite these challenges, the
company remains hopeful about demand, projecting a 4-5% growth in cement consumption for FY 2025, driven by ongoing infrastructure and housing projects.
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Management Commentary
“Overall, the industry expects an improvement in demand in H2 FY 2025, which is likely to be driven by a 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.
Conclusion
Looking forward, ACC remains optimistic about future growth prospects. Furthermore, the company expects cement consumption to rise by 4-5% in FY 2025. Additionally, ongoing infrastructure projects and housing developments should boost demand in the second half. However, the current share price reflects market concerns, dropping to Rs 2,216.25. Nevertheless, government infrastructure initiatives could provide needed support for recovery.
Written By: Dipangshu Kundu
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