Associated Cement Companies

The management of Associated Cement Companies (ACC) held a  conference call to discuss their quarterly and half-yearly results. The company  mentioned that it owed its good performance in Q2 FY05 to better  realizations and control over costs. Going forward, the company  expects increase in realizations from November 2004 onwards. ACC  management mentioned that the industry sailed through the monsoons without softening of prices, which is a good sign. Prices in  east India have not moved up till now. They will improve in the  coming months. Central and northern markets witnessed a higher  correction in the monsoon season. Prices in south were the lowest  during the period.

The  subsidiaries contribution to growth was substantial. Its  subsidiaries in east India have registered good growth resulting in  good growth on a consolidated basis. ACC’s growth volumes were not visible due to south Indian market, which saw 7-8% decline  in prices. The  company’s operating margins declined by 20bps sequentially in  Q2 FY05 to 16.9% due to increase in raw material prices. ACC said  that it does not foresee any significant increases in coal prices  in future. The company is in the process of buying a  power plant from Tata Power for its requirements.