Shares of five cement makers rose by 3.52% to 11.45% at 13:38 IST on BSE after sector bellwether ACC reported strong Q2 earnings.
ACC (up 11.45%), Ambuja Cements (up 7.30%), Sagar Cements (up 6.29%) and UltraTech Cement (up 3.52%), edged higher.Grasim Industries was up 7.47%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
The S&P BSE Sensex was up 58.54 points, or 0.16% at 36,777.14.
ACC's consolidated net profit rose 0.77% to Rs 328.74 crore on 13.75% rise in net sales to Rs 3767.90 crore in Q2 June 2018 over Q2 June 2017. The result was announced after market hours yesterday, 23 July 2018.
Neeraj Akhoury, managing director & CEO, said that the company has 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 the company's step change in cost management are favorably impacting its financial results. ACC remains optimistic in its capacity to develop new revenue lines as well as strengthen its performance in both the cement and ready mix business.
In its outlook, ACC said that the economic upswing in 2018 supported by buoyant consumption, a normal monsoon and uptick in rural demand is expected to benefit the construction sector. The company expects cement demand to be positive, driven by the 'Housing for All ' programme, sustained infrastructure spends and rural housing. ACC anticipates that cost pressures will remain, largely due to a rise in fuel costs as well other input material costs. ACC will continue to focus on improving efficiencies.
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