Holcim group of Indian companies — ACC and Ambuja Cements — has beaten the Street expectations in terms of a sharp increase in its profitability for the April-June quarter. Rise in realisation, coupled up with higher sales volumes, helped the sister companies post gains between 25 per cent and 35 per cent in their profits, against brokerages’ estimates, which were as low as 3.4-11 per cent.
ACC, India’s second-largest cement producer, posted a 26.3 per cent rise in its consolidated net profit at Rs 414.5 crore, against Rs 328.1 crore in the previous corresponding quarter.
Consolidated net sales grew 15 per cent to Rs 2,919 crore, compared to Rs 2,539.4 crore in the year-ago period. It sold 6.05 million tonnes of building material during the quarter, up two per cent against 5.93 million tonnes in the same quarter last year.
Its sister-concern, Ambuja Cements which has a manufacturing capacity of 25 mtpa, went step ahead of ACC as its net profit rose to Rs 469 crore, against Rs 348 crore, up 35 per cent.
Net sales during the second quarter of CY12 stood 18 per cent higher at Rs 2,566 crore, compared with Rs 2,176 crore last year. Ambuja’s cement dispatches were 7.3 per cent higher at 5.54 million tonnes.
Both the companies follow the calendar year for accounting. During the January-March quarter, both the cement majors had changed their accounting norms which had led to a disappointing show.
“Increase in realisation was barely sufficient to make up for the cost increase. The profit margin still improved due to higher sales volumes and improved operational efficiencies,” said Onne van der Weijde, managing director of Ambuja Cements, in a statement.
During the quarter, prices of cement remained firm at Rs 300 for a 50-kg bag. Prior to this, Aditya Birla group’s UltraTech Cement had reported a 14 per cent rise in its net profit for the quarter.
On the stock markets, on a day when broader markets closed in the red as benchmark indices lost 1.3 per cent of value, shares of Ambuja Cements gained 3.24 per cent and inched up close to its 52-weeks high as it last traded on the NSE at Rs 179.95. Stocks of ACC remained in positive territory for the major part of the trading session, but closed weak at Rs 1,269, down 0.56 per cent on the NSE.
Switzerland-based Holcim controls around 17 per cent of the market share through ACC and Ambuja in the Indian cement sector which has an overall capacity of 330 mtpa.