ACC

The company for its Q4 ended 31st Dec 2012 posted a 46% YoY fall in net profit at Rs.251 crore and yet the stock ended the day, up in the green. This was because, the company declared its numbers just 4 minutes before market closing and most did not expect the numbers to e this bad. Getting into the intricacies of the numbers, during the quarter had changed its method of depreciation but for which, its net profit would have been higher by Rs.50 crore. That’s not all. YoY, the numbers are bound to look depressed as last year in Q4, it had booked an exceptional gain of Rs.129 crore and we remove this gain, then the fall in 30%. QoQ, net profit is up 4%. The company had a 2% (YoY) and 6% (QOQ) higher net sales at Rs.2601 crore.

YoY freight rates have risen 11% and because the demand was muted, it was not able to pass on the entire cost rise to the consumer. Looking ahead, like all other cement companies, ACC too will have to face the cost pressures of freight and power, which are only expected to go up further. But at the same time, Jan to June is usually, seasonally the best time for cement companies and thus, if demand picks up, it will be able to pass on the costs to the consumers. That hopefully should help the company shore up its margins in its Q1. The company has ended the year with a net profit at Rs.1059 crore, down 19%. On an equity of Rs.188 crore, its EPS stands at Rs.56.42 (face value Rs.10).Reserves stands at Rs.7184 crore.