ACC Q1 results: Net profit jumps 105% to Rs 466 crore, revenue up 16.4%

Adani firm to not conduct separate, independent probe into Hindenburg allegations

Adani Group-promoted cement company ACC reported a twofold rise in profit for the 2023-24 (FY24) April-June quarter (first quarter, or Q1) on Thursday, backed by strong volume growth of 23 per cent. The company also stated that it will not conduct any separate, independent investigation related to the Hindenburg Research allegations.

In Q1FY24, ACC reported a consolidated profit of Rs 466.14 crore, a significant increase of 105 per cent compared to the year-ago quarter. Revenue from operations for the company rose by 16.4 per cent year-on-year (yoy) to Rs 5,201.11 crore. Sequentially, profit increased by 98 per cent and revenue by 9 per cent. The company stated that earnings before interest, tax, depreciation, and amortisation were up by 77 per cent yoy at Rs 848 crore.

The company reported a 23.2 per cent rise yoy in cement volumes for the quarter under review, reaching 9.4 million tonnes. In its outlook, the company expressed optimism about the cement industry, noting a positive demand cycle and favourable cost factors.

At 1320 hours on Thursday, ACC's scrip on the BSE was trading 1.2 per cent higher at Rs 1,945.9.

Do not deem necessary…

In its notes on the consolidated financial results, the company disclosed that ACC had decided not to carry out any separate, independent investigation, and the financial results do not include any adjustments related to this matter. This decision pertains to the US short-seller Hindenburg Research report on Adani Group companies released in January this calendar year.

The company clarified that Adani Group had already undergone a review by independent law firms for the financial year ended March 2022–23 (FY23), and their opinion confirmed the company’s compliance with all legal requirements.

The company stated that considering the ongoing regulatory investigations and related proceedings, it was not deemed necessary to conduct any separate independent investigation.

Last week, during ACC’s annual general meeting, 62.98 per cent of the voting from ACC’s institutional investors opposed the resolution for the adoption of standalone and consolidated financial statements for the financial year ended March 31, 2023 (FY23).

In a report dated July 3, Institutional Investor Advisory Services (IiAS), a proxy advisory firm, recommended that shareholders vote against the resolution for governance and financial impact reasons.

The firm stated, “The management has represented to the auditors that Adani Group has performed an internal assessment and obtained an opinion from an independent law firm in respect of evaluating relationships with parties having transactions with the holding company and referred to in the short seller’s (Hindenburg’s) report.”

IiAS further added, “However, pending the completion of proceedings before the Supreme Court and regulatory investigations, the auditors are unable to comment on the possible consequential effects on the financial statements.”

The independent auditor’s report for the latest results maintains this view.