12 Jul 2022
ACC Ltd's topline is seen as having recorded a double-digit growth on a low base in the quarter ended June, although sequentially it is seen flat on weak demand.
The company’s bottomline is seen having fallen on the back of contraction in operating profit due to rising input costs.
ACC's consolidated net sales in Apr-Jun are expected to be 43.3 bln rupees, 13.7% higher on year and 0.3% higher on quarter, according to an average of estimates by five brokerage firms.
The estimates put the company's consolidated net profit at 3.4 bln rupees, down 40% on year and down by 14% on quarter.
The company will declare its Apr-Jun results on Thursday.
ACC's volume in Apr-Jun is estimated at 7.5 mln tn by brokerage Kotak Institutional Equities. Low base of Apr-Jun quarter of 2021 will keep the on-year volume growth strong, the brokerage said.
Ramping up of new incremental capacity would be behind an on-year volume growth of 9%, brokerage Yes Securities said in its preview.
Sequentially, however, the volume is seen as having declined by around 4% by the two brokerages.
Sharp price hikes taken by the company during the quarter would have helped it clock better realisations, according to Kotak Institutional Equities, leading to a growth of 3% each on year and on quarter.
“We expect 12-15% QoQ (on quarter) increase in power-fuel cost led by higher pet coke and thermal coal prices in the past six months and a 5-7% QoQ increase in freight costs leading to 10% QoQ increase in costs/ton,” the brokerage said.
Rising input costs would have likely shrunk ACC’s operating margin in Apr-Jun and hit the net profit growth of the company. Tax costs are seen the uncertain factor that may buffer or worsen the fall in net profit.
Analysts will be closely watching management commentary on the future operations of the company given the big announcement during the June quarter that Adani Group will take over control of ACC, along with Ambuja Cement Ltd, in an all-cash buyout of Holcim Group’s stake.
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