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ACC: Jamul and Sindri Plant Stabilisation Boosts Performance - Views on News from Equitymaster

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  • Nov 9, 2017 - ACC: Jamul and Sindri Plant Stabilisation Boosts Performance

ACC: Jamul and Sindri Plant Stabilisation Boosts Performance
Nov 9, 2017

ACC has announced its financial results for the third quarter of the calendar year 2017. During the quarter ended September 2017, the company's standalone sales increased by 25.8% YoY, while net profit increased by 98.5% YoY. Here is our analysis of the results:

Performance summary
  • On a standalone basis, net sales reported a rise of 25.8% YoY during the quarter.
  • Capacity utilisation during the quarter stood at 73%, up from 66% seen during the corresponding quarter previous year. Cement sales volume stood at 5.96 million tonnes, higher by 18% YoY. The rise here was seen on the back of increasing premium product volumes and the stabilization of Jamul and Sindri plant capacities which were expanded during the year.
  • Operating profit rose 51.5% YoY during the quarter as operating margins improved from 9.6% in 3QCY16 to 11.6% in 3QCY17.
  • On the expenditure front, higher slag prices and fuel costs led to a 23.1% YoY increase in operating expenses.
  • Depreciation charges rose marginally by 1.4%, while finance costs decreased 4% YoY. There was also a rise in other income, which increased 13.6% YoY during the quarter and it aided profit before tax.
  • There was a sharp rise in the tax expense during the quarter, which limited the rise in the net profit to 98.5% YoY. Net profit margin increased from 3.7% in 3QCY16 to 5.8% in 3QCY17.

    Standalone Financial Performance Snapshot
    (Rs m) 3QCY16 3QCY17 Change 9MCY16 9MCY17 Change
    Net sales 24,277 30,545 25.8% 92,929 104,294 12.2%
    Expenditure 21,947 27,015 23.1% 82,648 92,395 11.8%
    Operating profit (EBITDA) 2,330 3,530 51.5% 10,281 11,899 15.7%
    EBITDA margin 9.6% 11.6%   11.1% 11.4%  
    Other income 755 858 13.6% 2,575 3,622 40.6%
    Depreciation 1,529 1,551 1.4% 4,373 4,823 10.3%
    Finance cost 221 213 -4.0% 617 689 11.7%
    Profit before tax 1,334 2,624 96.7% 7,866 10,008 27.2%
    Tax 439 847 93.0% 2,200 2,899 31.8%
    Effective tax rate 32.9% 32.3% 28.0% 29.0%  
    Profit after tax 895 1,777 98.5% 5,666 7,109 25.5%
    Net profit margin 3.7% 5.8% 6.1% 6.8%  
    No of shares (m)         187.8  
    Diluted EPS (Rs)*         40.4  
    P/E (times)         43.6
    *trailing twelve month earnings
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