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ACC: Jan-March Quarter Sales up 9% YoY, Margins Dip - Views on News from Equitymaster
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  • May 4, 2017 - ACC: Jan-March Quarter Sales up 9% YoY, Margins Dip

ACC: Jan-March Quarter Sales up 9% YoY, Margins Dip
May 4, 2017

ACC has announced its financial results for the first quarter of the calendar year 2017. During the quarter ended March 2017, the company's standalone sales increased by 9.1% YoY, while net profit declined by 9.9% YoY respectively. Here is our analysis of the results:

Performance summary
  • On a standalone basis, net sales reported a rise of 9.1% YoY during the quarter.
  • Capacity utilisation during the quarter stood at 81%. Cement sales volume stood at 6.6 million tonnes, higher by 3.8% YoY. The rise in volumes sales was supported by additional volume sold from expanded capacity at Jamul and Sindri plants.
  • EBITDA margin contracted from 11.6% in 1QCY16 to 9.6% in 1QCY17.
  • Along with muted operating performance, higher depreciation charges and finance costs resulted in 20.3% YoY drop in profit before tax during the quarter. The depreciation charges include additional depreciation during the reported quarter on account of commissioning of Jamul & Sindri projects in the second half of calendar year 2016.
  • There was a sharp drop in the tax expense during the quarter. And this limited the drop in the net profit to 9.9% YoY. Net profit margin contracted from 7.2% in 1QCY16 to 5.9% in 1QCY17.

    Standalone financial performance snapshot
    (Rs m) 1QCY16 1QCY17 Change
    Net sales 32,600 35,567 9.1%
    Expenditure 28,826 32,149 11.5%
    Operating profit (EBITDA) 3,774 3,418 -9.4%
    EBITDA margin 11.6% 9.6%
    Other income 1,131 1,101 -2.7%
    Depreciation 1,434 1,650 15.1%
    Finance cost 188 252 33.9%
    Profit before tax & exceptional items 3,283 2,617 -20.3%
    Exceptional gain/ (loss) - -
    Profit before tax 3,283 2,617 -20.3%
    Tax 937 502 -46.5%
    Effective tax rate 28.5% 19.2%
    Profit after tax 2,346 2,115 -9.9%
    Net profit margin 7.2% 5.9%
    No of shares (m) 187.8
    Diluted EPS (Rs)* 33.2
    P/E (times) 48.3
    *trailing twelve month earnings
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