(Corrects to add dropped word ‘volume’ in paragraph 3)
(Reuters) -Indian cement producer ACC reported a second-quarter profit jump on Friday, as prices rebounded on-year and volumes came in higher than expected in a seasonally weak period.
Pre-tax profit was 7.57 billion rupees ($86.1 million) for July-September, more than double from last year. The company received a tax write-back of 6.71 billion rupees in the reported quarter.
Meanwhile, revenue rose 28% to 58.17 billion rupees, helped by a 16% rise in volumes. Data from at least five brokerages showed that the expected volume growth was between 4% and 14%.
Shares of the company rose 2% after results.
For further earnings highlights, click here.
KEY CONTEXT
Adani Group-owned ACC, Ambuja Cements and larger rival UltraTech Cement have managed to shield their volumes from seasonal volatility, thanks to the string of deals inked in the sector recently, analysts said.
The quarter coincides with India’s annual monsoon season, during which construction takes a hit and demand for cement sags, pressuring volumes and prices.
While cement prices were little changed sequentially, they were 5% higher from last year, Ambit Research data showed. During most of 2024, cement prices corrected from previous year’s highs amid a drought of new projects exacerbated by India’s general elections.
Analysts expect cement demand to recover in the second half of fiscal year 2026, as tax-cuts-spurred demand boost trickles in.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBI Price/ Revenue Profit Mean No. of Stock to Div
TDA Sales growth (%) growth (%) rating* analyst price yield
s target** (%)
ACC 16.97 9.21 1.35 10.17 0.28 Buy 20 0.88 0.40
Shree Cement 46.57 17.98 4.61 10.63 34.50 Hold 21 0.93 0.55
UltraTech Cement 34.42 19.34 3.69 13.10 34.26 Buy 37 0.88 0.64
Ambuja Cements 32.38 14.98 3.07 18.90 11.07 Buy 38 0.86 –
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.8950 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Harikrishnan Nair)
