ACC

Despite higher power and fuel, freight and forwarding expenses, with tax outgo more than doubling up from Rs.83 crore to Rs.156 crore, on a good 10% (YoY) rise in cement sales volumes, ACC ended its Q2CY17 (Jan – Dec year ending) with a very healthy 33% jump in consolidated net profit at Rs.326 crore. What also helped the bottomline was the 20% increase in revenue at Rs.3959 crore.  The company stated that it was able to deliver a good performance due to quick ramp up if its Jamul integrated project, which helped it strengthen its footprint in Eastern India thus reaping more gains. In fact 30% of its revenue came from Eastern India where during Q2, cement prices were up 15%.

In Q1CY17, the company had launched two new brands - ACC Suraksha and ACC HPC and these too have been very well accepted in the market. Company’s EBITDA for the quarter was up 38% at Rs.637 crore while margins expanded by 240 bps to 18.4%.

Q3 is seasonally weak due to monsoon when cement prices are low thus its ability to repeat this show in Q3 seems doubtful. The next big trigger on the stock – merger with Ambuja Cements; news which has been doing the rounds for some time now.