Holcim group of Indian companies - ACC and Ambuja Cements have beaten down the street expectations in terms of sharp increase in their profitability for the April-June quarter. Rise in realisation coupled up with higher sales volumes helped the sister companies post gains between 25% and 35% in their profits against brokerages' estimates which were as low as 3.4-11%.
ACC, India's second largest cement producer with a capacity of 30 million tonnes per annum (mtpa), posted 26.3% rise in its consolidated net profit at Rs 414.5 crore against Rs 328.1 crore in the previous corresponding quarter. The company's consolidated net sales grew 15% to Rs 2,918.98 crore compared with Rs 2,539.41 crore.
The cement maker sold 6.05 million tonnes of building material during the quarter, up 2% 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 grew to Rs 469 crore against Rs 348 crore, up 34.9%. The company's net sales during the second quarter of CY12 stood 18% higher at Rs 2,566 crore compared with Rs 2,176 crore last year.
Ambuja's cement dispatches were 7.3% higher at 5.54 million tonnes. Both the companies follow calendar year for accounting. During the January-March quarter, both the cement majors had changed their accounting norms which had lead to disappointing show.
"Increase in realisation was barely sufficient to make up for 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 around Rs 300 for a 50 kg bag. Prior to this, Aditya Birla group's UltraTech Cement, India's largest cement maker, had reported 14% 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% of value, shares of Ambuja Cements gained 3.24% and inched up close to its 52 weeks high as it last traded on the National Stock Exchange at Rs 179.95.
Stocks of ACC, on the other hand, remained in positive territory for major part of the trading session, but closed weak at Rs 1,269, down 0.56% on NSE.
Switzerland-based Holcim controls around 17% of the markets share through ACC and Ambuja in the Indian cement sector which has an overall capacity of 330 mtpa.
