Indian cement maker ACC reported a third-quarter profit surge on Monday, as strong sales volume growth cushioned the impact of weak prices.
The Adani group firm’s profit after tax more than doubled on-year to 10.89 billion rupees ($126.10 million) for the three months to Dec. 31.
Revenue rose 7% to 51.76 billion rupees.
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KEY CONTEXT
ACC posted a 21% growth in volumes in a seasonally-weak quarter, when lack of labour hits construction activities, higher than the as much as 16% growth estimated by analysts from four brokerages.
The firm said it is expecting a rebound in cement demand in the ongoing quarter.
ACC’s volumes likely benefitted from market share gains of its parent as a result of the Adani conglomerate’s dealmaking spree.
Last week, market leader UltraTech Cement forecast that the demand and price of the construction material are improving. The other Adani-owned cement company, Ambuja, will report later this week.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
ACC – 9.75 8.15 24.77 Buy 18 0.79 0.36
Ambuja Cements 40.56 15.47 18.55 30.41 Buy 31 0.85 0.36
UltraTech Cement 37.20 20.05 16.63 31.95 Buy 37 0.91 0.62
Shree Cement 49.94 18.77 8.02 18.92 Hold 17 0.99 0.41
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.3710 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Mrigank Dhaniwala)
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