ACC continues to improve

Indian Cement companies have enjoyed a significantly better operating environment in the June quarter, and this is reflected in ACC’s results. The takeaway from ACC’s results is that price realisations are approximately 15 - 17 per cent higher year-on-year, enough to offset increases in raw material costs like coal. As a result, ACC’s profit before tax and exceptional items has grown by 54 per cent to Rs 111.86 crore in the June quarter.  While ACC is no doubt an all-India player, it has been laying increasing emphasis on expanding its production and distribution strategy in the rapidly growing and more profitable markets of Eastern India.

As part of that strategy, it had recently purchased Bargarh Cement (formerly IDCOL Cement), and is implementing a modernisation of its Chaibasa plant. This strategy has helped improve cement segment revenues by 15 per cent to Rs 844.62 crore in the June quarter. In addition, segment profitability has also risen by 74.2 per cent to Rs 151.04 crore.

The refractory division has performed better due to a surge in demand from the industrial sector _- as a result, segment revenues have grown by 28.9 per cent to Rs 49.11 crore in the June quarter. Also segment profitability has grown by 73 per cent to Rs 7.68 crore.

And with the monsoons reviving in many parts of the country over the last few days, cement demand is expected to remain strong in the second half of FY05.