ACC net profit falls 40% on poor demand

Share price of ACC gained 4.78% to trade at Rs 1,393.30 apiece on NSE despite the cement maker reported a 40% fall in consolidated net profit at Rs 270.95 crore during the April-June quarter financial year 2021 as against Rs 455 crore in the same period last year, on the back of subdued demand for cement as construction sector is hit by the nationwide lockdown.

Total sales fell 38% to Rs 2,520 crore during the Q1 of FY21, as against Rs 4,059.28 crore in the same quarter last year. The company reported sales of Rs 3,433 crore in the March quarter. Revenue from operations declined by 37% year on year and was recorded at Rs 2,602.24 crore.
Standalone revenue of the company decreased 37.31 per cent YoY to Rs 2,600.83 crore in Q1 FY21, over Rs 4,149.72 crore in the same period last year.

Sales volume declined by 33% YoY and 27% QoQ at 4.8 million tonnes, while cement realization stood at Rs 5144 per tonne.
ACC’s cement business revenue for the June quarter eased 33% yoy, to Rs 2,550 crore, and ready mix concrete revenue was down by 83% to Rs 62 crore.

The cement makers total expenses too declined by 36% to Rs 2,252 crores in June quarter of FY 20 as against Rs
3,533 crores in FY19, mainly due to a decrease in employee cost to the extent of 12%, and a drop in raw material cost to the extent of 63% yoy.
The operating cost per tonne contracted by 7.5% YoY and 2.7% QoQ at Rs 4,326 mainly led by sharp decrease in freight and other expenditure on a per tonne basis. However, lower utilization led to input cost/tonne from raw material, fuel and power to see sequential jump of around 8%.

EBITDA, excluding Rs 80.5 crore of other operating income declined by 36% YoY to Rs 444 crore, while EBITDA per tonne stood at Rs 915 as against Rs 922 in Q1 of FY20 and Rs 741 in the March Quarter.
Rating agency, ICRA expects cement demand to fall 22%-25% in FY2021 due to the prolonged nationwide lockdown and subsequent state and city specific restrictions disrupting construction activities.

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