A worker stands on scaffolding as he trowells cement at a construction site. (Photographer: Kuni Takahashi/Bloomberg)

Q2 Results: ACC’s June Quarter Profit Beats Estimate On Higher Volumes

ACC Ltd. rose the most in over nine years after it managed to beat earnings estimates for a sixth straight quarter, aided by volume growth.

Net profit rose 1 percent from the year-ago period to Rs 325.5 crore in the April-June quarter, the cement maker said in an exchange filing today. That's higher than the Rs 239 crore estimated by analysts tracked by Bloomberg. The volumes during the quarter grew 7 percent to 7.24 million tonnes.

The company’s revenue rose 11 percent from last year to Rs 3,848.2 crore, beating the consensus forecast of Rs 3,654 crore.

The cost management measures have favourably impacted our financials, Managing Director and Chief Executive Officer Neeraj Akhoury said. The company is upbeat about developing new revenue lines and strengthening the performance in cement and ready-mix businesses, he said.

ACC’s earnings before interest, tax, depreciation and amortisation fell 2 percent to Rs 625 crore, and the margin contracted 220 basis points to 16.2 percent. The company said the rise in energy and slag prices adversely impacted operating costs during the reporting quarter compared with the year-ago period.

The company follows a January-December financial year.

Higher volume growth and better pricing power in the east have led to a good set of numbers. This, along with a stable cost structure, led to operational efficiency for the company.
Binod Modi, Analyst, Reliance Securities

Other Highlights

  • Realisation per tonne rose 6 percent to Rs 5,204.
  • Ebitda per tonne fell 9 percent year-on-year to Rs 862.

Shares of the company rose as much as 13.3 percent, the most since May 2009, to Rs 1,484.90 on Tuesday.

Also read: ACC, Ambuja To Supply Cement To Each Other At A Discount

Here’s What Brokerages Had To Say About ACC Post Q1 Results


  • Strong quarter, but remain cautious.
  • ACC should start underperforming on volume growth in absence of capacity additions.
  • Valuations have corrected, but triggers for a re-rating are lacking.
  • Expect costs to ease in coming quarters.
  • Maintained ‘Neutral’ with a price target of Rs 1,640.


  • June quarter was strong with Ebitda and net profit ahead of estimates.
  • Surprisingly strong realisations and modest cost inflation.
  • Cut earnings estimates by 10-12 percent as lower realisations expected in second half of 2018 and 2019.
  • Maintained ‘Buy’; cut price target to Rs 1,900 from Rs 2,150.


  • Adjusted Ebitda a big beat driven by realisation and cost controls.
  • Delivered meaningful improvement in operating trends over the last six quarters.
  • ACC’s valuation is cheap, and earnings surprise could drive a sharp rally.
  • Clarity on new capacity expansion/M&A will be key.
  • Maintained ‘Neutral’; cut price target to Rs 1,500 from Rs 1,680.

Morgan Stanley

  • Earnings surprise led by better realisation owing to geography and mix channel.
  • Expect margin expansion to drive earnings as utilisation and volume growth at peak.
  • Expect freight cost to remain stable at these levels in ensuing quarters.
  • Maintained ‘Overweight’ with a price target of Rs 1,887.