ACC’s Bottomline Dips 50% In September 2013 Quarter

There is no cheer for investors in ACC as the company has posted subdued numbers in Q3CY13. The company follows the calendar year as its fiscal year.

During the quarter, the net sales of the company dipped marginally by 1% to stand at Rs 2509 crore as against Rs 2586 crore in Q3CY12, while its bottomline declined by 51% to Rs 119 crore from Rs 242 crore YoY.

On a yearly basis, the total expenses of the company (excluding financial costs) rose by 7% to Rs 2430 crore. The financial cost of the company plunged by 57%. There was a decline in its power and fuel cost by 2% to Rs 558 crore, while raw material costs surged by 5% to Rs 386 crore.

ACC’s realisations per tonne have risen marginally from Rs 5390 in Q3CY12 to Rs 5411 in Q3CY13. Its EBITDA margin dipped by 761 basis points to 9% in the quarter. On a yearly basis, the EBITDA per tonne stood at Rs 406.

The company has made satisfactory progress in its expansion project at Jamul, Chhattisgarh, which would improve its capacity by 2.79 MTPA. This is expected to be completed by 2015, while the project at Sindri, Jharkhand has commenced as per schedule.

A tough economic situation, slow industrial and agricultural growth, increased raw material costs and volatile foreign exchange rates are some of the major causes for such a setback in the growth of the cement sector. Adding to this is the high diesel prices, which in turn has increased the logistics costs, thus hampering the profit margin of the company.

On a YTD basis, ACC’s stock has dipped by 20% to Rs 1156, with a TTM price-to-earnings ratio of 20x. Considering the overall scenario, it would be advisable for investors to stay away from this scrip.