ACC Q2 sales volume at 9.7 million tonnes; revenue at Rs 5,689 crore

What happened

ACC reported second-quarter cement sales volume of 9.7 million tonnes and revenue from operations of Rs 5,689 crore. Profit after tax was Rs 93 crore, down from Rs 1,119 crore a year earlier, when results included a large tax-related gain.

Confirmed

Global impact / market context

Lower revenue and profit show the cement maker earned less as sales volumes slipped and operating margin narrowed to 7 per cent from 14.1 per cent. Thinner profit per sale leaves less cash internally for debt payments, dividends and new plant spending.

Analyst inference

Investors compare ACC with other cement producers on volume growth and profit per tonne. A 7 per cent operating margin and weaker profit may make the stock look less attractive versus peers, potentially affecting demand for its shares.

Analyst inference

What to watch

1. ACC commissioned 3.4 million tonnes per annum of additional cement capacity, including a 2.4 MTPA greenfield grinding unit at Salai Banw, which means new capacity that must be used efficiently to justify the spending. Confirmed
2. Watch whether the new capacity lifts sales volumes next quarter, since higher volumes could spread fixed costs across more tonnes and help rebuild the operating margin from its current 7 per cent level. Analyst inference
3. Track the share of premium products and blended cement, at 47 per cent of trade sales and 85 per cent overall, because richer product mix can support revenue per tonne and profit per sale. Analyst inference

Evidence

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