Despite Covid-19 headwinds, Indian economy is witnessing early signs of recovery. At ACC, this recovery has been reflected in our results where our volumes and sales have bounced back to prior year levels,” said Sridhar Balakrishnan, managing director, ACC.
The company follows January to December as the financial year.
ACC has registered an earnings before interest, tax, depreciation and amortization of Rs 511 crore, a growth of 20 per cent YoY. During the quarter under review the company registered a net sales of Rs 3,468 crore, with cement sales volume at 6.49 million tonnes and ready mix concrete volumes at 0.46 million cubic meters.
“Our focus on premium products has enabled Net Sales growth of 4 per cent in Cement over previous year,” the company said in a statement.
The company’s operating Ebitda grew by 21 per cent YoY to Rs 671 crore and the company has said that its operating cost per ton of cement continues to reduce as we realize benefits of our efficiency and cost reduction programs.
The company’s focus continues to be on cash conservation
“Our efficiency and cost reduction plans have helped drive significant margin expansion during the quarter. We continue to manage working capital effectively resulting in healthy cash flow delivery. Our focus continues to remain on ‘Health, Cost and Cash,” Balakrishnan said.
“Superior realization has resulted in ACC to report stellar performance, which was also aided by resilient opex. Ebitda for 9MCY20 stood at Rs15.6bn as against our estimate of Rs19.4bn for CY20, which is most likely to be exceeded and therefore earnings upgrade will be on the cards,” said Binod Modi, Senior Research Analyst at Reliance Securities.
“We have a Buy rating on the stock with the target price of Rs 1,718,” Modi added.
The Company believes that India’s economic recovery is underway and the economy will bounce back strongly in the next few quarters.
“The Government’s thrust on infrastructure development, increased spending through measures aimed at reviving the rural economy and a sharper focus on the affordable housing segment is expected to drive strong resurgence of cement demand,” Balakrishnan said in a statement.