ACC Q2 net profit rises 5x to Rs 1,119 crore on tax refunds and record sales

MUMBAI: Cement manufacturer ACC has reported a five-fold increase second-quarter consolidated net profit from a year ago, helped by a tax recovery, and said it expects a revival in demand due to the VAT cut and improved economic sentiment.

Consolidated net profit for the September quarter rose to Rs 1,119.26 crore, the Adani group company said on Friday, adding that the tax refund of Rs 671.41 crore was due to rollback of certain tax provisions made by the company earlier, and cash refund of taxes.

Consolidated quarterly revenue of Rs 5,932 crore was the highest of any quarter in September and was up 28% from a year ago.

ACC’s sales growth was supported by a 16% increase in sales volume to 10 million tonnes. It was the highest-ever September quarter revenue for the company, the company said.

“Despite the challenges of prolonged monsoons, the sector will benefit from several favorable developments including GST 2.0 reforms, Carbon Credit Trading System (CCTS) and withdrawal of coal storage,” CEO Vinod Bahety said in a company statement.

“These developments will support steady demand momentum going forward,” he said. ACC had an operating profit before interest, tax, depreciation and amortization of Rs 846 crore in the September quarter, up 94% year-on-year, while EBITDA margin improved 480 basis points year-on-year to 14.3%. The company achieved an EBITDA of Rs 849 on every tonne of cement sold, up 67% year-on-year.

“As part of the larger Adani Cement family and under the parentage of Ambuja Cements, ACC benefits from the Group’s integrated ecosystem, which includes logistics, renewable energy and innovation,” Bahety said.

ACC saw energy and logistics costs decline year-on-year in the September quarter, while green energy consumption as a percentage of total energy consumption and direct shipments increased.

“Together with the parent company, ACC continues to work on cost leadership and targets to achieve Rs 3,650/MT by FY28,” the company said in the statement.

ACC has an annual production capacity of 40.4 million tons, which will increase to 43.7 million tons in the current quarter. Removing bottlenecks at the plants is likely to add another 5.6 million tonnes of capacity over the next 24 months, the company said.

“With a GST cut from 28% to 18%, improved economic sentiment and higher investments from both public and private sectors, demand is expected to see an increase, sticking to our previous annual growth estimate of 7-8%,” the company said in its outlook.

ACC reported its earnings during market hours. The company’s shares ended 1.2% higher on the BSE, closing at Rs 1,881.30.