ACC Reports 20% Drop In Net Profit for March Quarter Amid Rising Cost of Raw Materials

Cement major ACC Ltd. reported a more than 20% decline in its net profit for the March quarter, despite a nearly 13% rise in sales. The rise in sales was offset by a 65% increase in stock-in-trade purchases and a 24% increase in raw material costs.

For the March quarter, ACC posted a net profit of ₹7.51 billion, down from ₹9.43 billion in the same period last year. The result exceeded analysts' expectations, which had projected a profit of ₹4.73 billion.

Government grants for the quarter fell by nearly 90%, totalling ₹748.5 million, while other income decreased by 62% to ₹1.94 billion. The company also reported a one-time loss of ₹1.35 billion.

For the 2024-25 financial year (April-March), ACC's clinker and cement sales volume increased to 42.2 million tonnes, up 14% from the previous year. Cement and clinker sales for the March quarter rose by 13% to 11.9 million tonnes.

The company declared a dividend of ₹7.50 per share. Its operating earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at ₹8.30 billion, with an EBITDA margin of 13.7%, down from 15.5% in the same quarter last year. For the full year, the EBITDA margin was 14.1%, down from 15.3% in the previous year. The full-year EBITDA was virtually unchanged at ₹30.61 billion compared to ₹30.62 billion the year before.

ACC's total income for the quarter reached ₹62.60 billion, a 13% increase from ₹55.23 billion in the same quarter last year. Sequentially, the company saw a 15% increase in revenue, although other income dropped 70%, leading to a nearly 5% decrease in total income compared to the previous quarter.

Power and fuel expenses for the quarter decreased by nearly 11% to ₹8.70 billion. The company’s total expenses rose 13% to ₹55.14 billion, compared to ₹48.75 billion a year earlier, with freight and forwarding expenses rising slightly. ACC’s tax expense for the quarter was ₹1.31 billion, compared to a write-back of ₹603 million in the same quarter last year.

Looking ahead, the company expects cement demand to grow 7-8% in the current financial year, supported by government spending on infrastructure and construction.