ACC's Q2 net profit returns from negative territory to Rs 388 crore

26 Oct 2023 , 03:48 PM

The Adani Group-owned ACC announced on October 26 that, compared to a loss of Rs 87.35 crore in the same quarter the previous year, its consolidated net profit for the quarter that ended in September was Rs 387.85 crore. A considerable drop in power and fuel costs contributed to the profit.

The cement manufacturer reported in a regulatory filing that its revenue from operations increased by 11.22% to Rs 4,434.73 crore from Rs 3,987.34 crore.

According to ACC, cost reductions and operational effectiveness were the main drivers of its EBITDA (profits before interest, taxes, depreciation, and amortisation) of Rs 759 crore. The EBITDA margin increased from 2.1% to 16.3%, a 14.2% point (pp) increase.

Ajay Kapur, Whole Time Director & CEO, ACC, stated, ‘This impressive growth is attributed to the improved demand for our premium cement products, which is up 1.5 pp YoY – at 32% of trade sales – and our commitment to improving operational efficiency and prioritizing environmental sustainability. Throughout the quarter, net dealer additions of 534 were made across all markets.

The company reduced the cost of kiln fuel from Rs 3.19 to Rs 1.85 per 1000 kcal, and its electrical energy usage improved by 6.4 kWh/t at 73.9 kWh/t. The clinker factor also decreased from 57.2% to 56.6%.

Kapur continued, ‘Rail coefficient increased by 5pp to 34% and road direct despatch increased from 52% to 58% as a result of logistics efficiencies.’

‘Cement industry to witness volumetric growth as demand environment remains robust on the back of increased housing and infrastructure spend,’ stated the ACC in its outlook. ‘Healthy growth and demand prospects augers well with company’s growth ambition with leading margins.’

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