Cement shares rally as ACC June quarter earnings beat estimates

ACC, India Cements, Ambuja Cements, Dalmia Bharat, Orient Cement, Birla Corporation, Grasim Industries, JK Cement, Heidelbergcement India, UltraTech Cement and Shree Cement were up 3% to 13%.

Shares of cement companies have rallied up to 13% on the BSE in early morning trade after ACC reported a better-than-expected consolidated net profit of Rs 3.29 billion for the June 2018 quarter. The company had profit of Rs 3.26 billion in year ago quarter.

Net sales during the quarter under review surged 13% at Rs 37.68 billion against Rs 33.29 billion the corresponding quarter of previous year. Analysts, on an average, had expected profit of Rs 2.56 billion on net sales of Rs 36.36 billion for the quarter.

ACC reported operating EBITDA (earnings before interest, taxes, depreciation and amortization) of Rs 6.25 billion against analyst estimate of around Rs 4.55 billion. Cement volume grew 7% at 7.24 million tonnes as compared to 6.74 million tonnes in previous year quarter.

"We have achieved robust scale in Q2 2018, growing both cement and the ready mix concrete business by 7% and 22% respectively, as well as delivering a consolidated EBITDA growth of 5% YoY. On the other hand, cost headwinds continue, driven by the rise in input material and logistics costs. The positive impacts of our step change in cost management are favorably impacting our financial results,” said Neeraj Akhoury, Managing Director & CEO.

ACC expect cement demand to be positive, driven by the 'Housing for All ' programme, sustained infrastructure spends and rural housing.  The company anticipates that cost pressures will remain, largely due to a rise in fuel costs as well other input material costs. The company said it will continue to focus on improving efficiencies.

Among other cement counters, India Cements, Ambuja Cements, Dalmia Bharat, Orient Cement, Birla Corporation, Grasim Industries, JK Cement, Heidelbergcement India, UltraTech Cement and Shree Cement were among notable cement stocks were up 3% to 9% on the BSE. In comparison, the S&P BSE Sensex was up 0.38% or 139 points at 36,857.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
ACC	1462.00	1305.35	12.00
SAURASHTRA CEM.	60.05	55.10	8.98
SHIVA CEMENT	22.40	20.60	8.74
UDAIPUR CEMENT	18.65	17.20	8.43
AMBUJA CEM.	212.85	197.95	7.53
INDIA CEMENTS	114.70	106.95	7.25
ORIENT CEMENT	121.25	113.55	6.78
PANYAM CEMENT	18.95	17.75	6.76
KAKATIYA CEMENT	238.60	223.75	6.64
MANGALAM CEMENT	217.05	203.55	6.63
NCL INDS.	157.80	148.05	6.59
DALMIA BHAR.	2556.00	2398.45	6.57
GUJ. SIDHEE CEM.	28.80	27.15	6.08
SANGHI INDS.	87.80	82.95	5.85
BIRLA CORPN.	730.00	692.55	5.41
PRISM JOHNSON	102.45	97.25	5.35
SAGAR CEMENTS	749.75	715.05	4.85
OCL INDIA	1175.00	1129.70	4.01
HEIDELBERG CEM.	146.85	141.40	3.85
J K CEMENTS	780.00	752.00	3.72