ACC's consolidated net profit dropped 29.66% to Rs 396 crore on a 2.58% increase in net sales to Rs 4,322 crore in Q1 March 2022 over Q1 March 2021.
On a consolidated basis, profit before tax (PBT) skid 29.44% to Rs 532 crore in Q1 March 2022 from Rs 754 crore in Q1 March 2021. The company's efficiency project 'Parvat' helped it to deliver 1% lower per ton freight & forwarding cost despite fuel inflation and its cost control measures enabled reduction in fixed cost as compared to previous year.
Consolidated EBITDA declined 26.16% to Rs 635 crore in Q1 March 2022 as against Rs 860 crore in Q1 March 2021, due to significant fuel cost increase despite project 'Parvat' delivering strong internal efficiencies. The EBITDA margin stood at 14.7% during the quarter as against 20.4% in the corresponding quarter, last year.
Sales volume of Cement fell 3.26% to 7.71 million tones in Q1 March 2022 as compared 7.97 million tones in Q1 March 2021. Sales Volumes of Ready Mix Concrete rose 4.81% to 0.87 million cubic metres in Q1 March 2022 over 0.83 million cubic metres in Q1 March 2021.
Sridhar Balakrishnan, the managing director (MD) and chief executive officer (CEO) of ACC, stated, ACC's focussing on capacity growth, delivering cost reduction and sharp actions on sustainability has continued. Our execution capabilities to drive efficiencies and commission new projects have enabled us to make ACC significantly stronger. The January to March 2022 quarter was impacted due to the global rise in fuel costs driven by the overall geopolitical situation. Our efficiency and cost reduction actions under project 'Parvat' remained very strong and helped us partially offset the impact.
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The new investments in waste heat recovery systems will help us mitigate the energy cost inflation while also strengthening our sustainability actions. ACC has been a pioneering brand with a history of 'Category first' innovations that have gone on to set new benchmarks. Our Green Concrete ECOPact is now 17% of the total Readymix sales. We have further expanded our ECO friendly product portfolio by launching a new climate control concrete insulation system 'AIRIUM' during the quarter. The India story remains intact. Our ongoing initiatives on growth, sustainability and productivity improvements will continue as we progress on the consequent execution of our strategy, Mr Balakrishnan added.
In its outlook, ACC said that the demand situation will further improve in the coming months supported by an improving domestic economic environment and various initiatives from the Government in terms of increased spending on infrastructure development.
Separately, during market hours today, the media reports suggested that world's largest cement maker, Holcim Group is planning to exit the Indian market. As a result, it has reportedly put its two listed firms, Ambuja Cements and ACC, up for sale. As per the latest shareholding pattern (as on 31 March 2022), Holderind Investments (Holcim) held 63.19% stake in Ambuja Cements. In ACC, Holcim held 4.48% stake while Ambuja Cements held 50.05% stake.
As per reports, taking over Ambuja Cements and ACC will help succeed any player to evolve to the second position in the cement space. The combined pan India capacity will reportedly be around 66 million tonnes per annum.
According to a domestic brokerage report, the acquisition would be cumbersome and would be within the reach of only a few business groups. A promoter stake sale in Ambuja Cements would reportedly trigger an open offer in both, ACC and Ambuja Cements. The potential deal size could reportedly be $10-12 billion as per the brokerage's estimates.
Shares of ACC declined 4.44% to end at Rs 2,057.90 on BSE. ACC, a member of the Holcim Group, is one of India's leading producers of cement and ready mix concrete.
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