Rising costs offset volume growth benefits for ACC; stock falls 1.4%

Profitability below Street estimates because of subdued realizations

Rising costs and flat realisations meant ACC’s December quarter profits were lower than expectations even as volume growth remained strong. Its stock lost 1.4 per cent on Tuesday. 

The company continues to witness strong volume growth, led by robust demand and capacity expansions in the east. Cement sales at 7.5 million tonnes (mt) grew 8 per cent year-on-year, and 14.5 per cent sequentially, which were ahead of expectations. The ready-mix concrete business, too, saw double-digit growth sustain at 15 per cent year-on-year.

However, realisations played spoilsport. Higher realisations in central and north India were largely offset by weaker prices in east and