ACC Ltd, one of India’s leading cement manufacturers and a subsidiary of the Adani Group, has delivered impressive financial results for the fourth quarter ended March 2024. The company reported a remarkable 216% increase in standalone net profit, reaching Rs 749 crore compared to Rs 237 crore in the corresponding period last year. Additionally, its standalone revenue surged by 13% to Rs 5,398 crore from the previous year.
On a consolidated basis, ACC’s net profit soared by a staggering 300% to Rs 945 crore in the quarter, compared to Rs 236 crore in the same period last year. Consolidated revenue from operations also saw robust growth, rising to Rs 5,409 crore from Rs 4,791 crore recorded last year.
In light of its strong financial performance, ACC announced a dividend of Rs 7.50 per equity share with a face value of Rs 10. Following the announcement, ACC’s shares were trading nearly 1% higher at Rs 2,575.2 apiece.
The company attributed its impressive performance to various factors, including improved EBIT (earnings before interest and taxes) which stood at Rs 721 crore for the quarter, up from Rs 411 crore in the same quarter last year. ACC also reported a significant improvement in EBIT margin, which rose from 8.6% in Q4 FY23 to 13.3% in Q4 FY24.
ACC remains optimistic about the outlook for the cement industry, citing higher budgetary allocations to infrastructure, government initiatives for affordable housing, and green energy transition. Cement volume growth recovered to a healthy 7-8% year-on-year in the last quarter of fiscal 2024, driven by aggressive volume push initiatives.
However, analysts caution that factors such as stocking in March, labor shortages due to holidays and elections, and potential price wars amidst increased competition could impact cement demand and margins in the near term.
The cement industry has witnessed heightened competition for market share, with major players aggressively pursuing consolidation strategies. Despite firm pricing in the early months of the fourth quarter, January and February saw limited sustained price hikes, indicating intense competitive pressures in the market.
Overall, ACC‘s stellar performance in Q4 FY24 reflects its resilience and strategic positioning in the cement industry, setting a positive trajectory for the company amidst evolving market dynamics.