For the quarter ending in March 2023, cement manufacturer ACC Ltd, which is now a part of Adani Cement, reported a decline of 40.53% in its consolidated net profit to 235.66 crores. The January-March quarter of the prior year saw the corporation report a profit of 396.33 crore.
However, ACC’s total operating revenue during the reviewed quarter was $4,790.91 crore, up 8.23% from $4,426.54 crore during the same period last year.
The overall expenditures for ACC increased by 14.10% to 4,514.38 crores. Sales of cement and clinker for the company totaled 8.5 million tonnes, an increase of 7.6% from the January-March quarter of the previous fiscal.
The management of the organization is nevertheless upbeat about its chances for growth and long-term competitiveness despite the decline in net profit.
Our transformation journey, driven by significant operational efficiency, enhanced synergies, and business excellence, has significantly improved our financial performance and key business metrics, according to Ajay Kapur, the company’s chief executive officer full-time Director and CEO of ACC.
We have an intensive arrangement that subtleties the expense parts as a whole and our endeavors to decrease and inflate costs. Together with the capex program, this will put the business back in a growth trajectory consistent with its history.
According to ACC, the operating revenue for the first 15 months of this year, or the fiscal year ending March 31, 2023, is 22,210.18 crores. The business now ends its fiscal year in March instead of December.
Since the current year’s figure only covers fifteen months, it cannot be compared to the figures for the twelve months that ended on December 31, 2021, it said.
According to a press release from the company, ready-mix concrete volume increased by 10% YoY, while cement volume increased by 4% in the quarter under review.
However, the company’s earnings before interest, tax, depreciation, and amortization (EBITDA), which were at 16 crores against 712 crores YoY, were negatively impacted by the sharp increase in fuel costs. As a result, the EBITDA margin was 0.4%, significantly lower than analysts’ predictions of 6%.
ACC’s board of directors proposed a dividend on equity shares of 9.25 rupees per share despite the difficult quarter, and the stock of the business closed at 1,747.10 on the Bombay Stock Exchange, up 0.51% from the previous closing.
The paucity of trucks and containers, growing logistical expenses, and an increase in fuel prices have all put pressure on the cement business. The industry has also been damaged by the COVID-19 epidemic, which has decreased demand from the infrastructure and construction sectors.
However, it is anticipated that the cement industry will experience significant growth in the upcoming years as a result of the government’s push for infrastructure development, including the National Infrastructure Pipeline (NIP).
Overall, ACC has experienced difficulties this quarter, but it is still dedicated to enhancing its financial performance through sizable operational improvements and commercial excellence. The outlook for the cement business in India is still favorable due to the government’s emphasis on infrastructure development, and ACC is well-positioned to profit from this pattern in the long run.