ACC: It is still a long way baby!! - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

ACC: It is still a long way baby!!

Apr 19, 2000

According to newspaper reports, Associated Cement Companies (ACC) has successfully reduced the number of employees by 2,150 by offering them attractive voluntary retirement schemes. The number of employees after this reduction would be 11,000. This is commendable for a company that had 15,280 employees in FY95. Apart from other manufacturing inefficiencies, huge employee costs has always been a drag on the profitability of ACC. The company has in the recent past taken steps to improve its profitability and productivity. However, it still has a long way to go to achieve the employee productivity levels that the more efficient players in the industry have been achieving.

In FY99, on a per employee basis GACL is well ahead of the other players. Cement sold per employee for ACC is 31% of GACL and 47% of Madras Cements and revenues per employee for ACC is 37% of GACL and 69% of Madras cement.

Between GACL and Madras Cements, employees of GACL sell 52% more cement than Madras Cements and earn 88% higher revenues and 311% higher profits than Madras Cements.

  ACC
(March 99)
GACL
(June 99)
Madras Cements
(March 99)
No. of employees (approx) 13,018 2,300 1,750
No. of tones sold per employee 709 2,300 1,511
Revenues per employee (Rs “000”) 2,002 5,444 2,894
Net profits per employee (Rs “000”) (60) 531 129

These figures for ACC will look marginally better after the reduction in the number of employees.

The market has not ignored these differences and has given lower value to ACC compared to GACL. Market capitalization for ACC is Rs 2,250 per tonne compared to Rs 4,500 per tonne for Gujarat Ambuja and Rs 1,500 per tonne for Madras Cements. Although ACC appears expensive, the higher valuations for ACC compared to Madras Cements probably reflects the fact that with GACL taking a stake in ACC, there is a possibility of substantial improvement in ACC’s efficiencies.


Equitymaster requests your view! Post a comment on "ACC: It is still a long way baby!!". Click here!

  

More Views on News

ACC Announces Quarterly Results (4QFY20); Net Profit Down 6.4% (Quarterly Result Update)

Apr 24, 2020 | Updated on Apr 24, 2020

For the quarter ended March 2020, ACC has posted a net profit of Rs 3 bn (down 6.4% YoY). Sales on the other hand came in at Rs 35 bn (down 10.7% YoY). Read on for a complete analysis of ACC 's quarterly results.

ACC Announces Quarterly Results (3QFY20); Net Profit Down 63.2% (Quarterly Result Update)

Feb 10, 2020 | Updated on Feb 10, 2020

For the quarter ended December 2019, ACC has posted a net profit of Rs 3 bn (down 63.2% YoY). Sales on the other hand came in at Rs 41 bn (up 4.2% YoY). Read on for a complete analysis of ACC 's quarterly results.

ACC LTD 2017-18 Annual Report Analysis (Annual Result Update)

Mar 5, 2019 | Updated on Mar 5, 2019

Here's an analysis of the annual report of ACC LTD for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of ACC LTD. Also includes updates on the valuation of ACC LTD.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

ACC SHARE PRICE


Sep 28, 2020 03:14 PM

TRACK ACC

ACC - HOLCIM COMPARISON

COMPARE ACC WITH

MARKET STATS