ACC
On the face of it, the performance of the company for Q1 ended 31st March 2015 (year ending 31st Dec), does not look too encouraging – its consolidated net sales for the quarter has dropped 3% (YoY) at Rs.2885 crore and it ended the quarter with a net profit of Rs.236 crore, down 41%. This fall is sharp on account of two things – exceptional expense of Rs.164 crore and tax burden of Rs.78 crore , which is related to credit relating to earlier years. Its cement sales volume declined 10% to 5.82 million tonne. The company states that lower demand for cement from infrastructure and general construction sector, the overall cement sales volume registered a decline.
The good part of the numbers - EBITDA for the quarter came in at Rs.609 crore, up 43% and it managed to bring down operating costs down by 3.6%. Operating margin was at 14.4% v/s 12.3%. Despite the fall in bottomline the stock price is up today and this is on account of optimism that Q2 for the company will be much better as cement offtake has risen and more importantly, prices have started rising – per cement bag is Mumbai is up by Rs.8-10 and this is expected to increase further. Thus the optimism is about the coming quarter, the poor Q1 has already been discounted for.