ACC shares crack over 2% despite robust Q4; here’s why

Shares of ACC dropped over 2% in intraday trade on Friday as investors booked profit after the Adani Group company released its March quarter earnings report. The cement stock snapped a three days gaining streak after rising 7% in the past three sessions.

Early today, ACC shares opened higher at ₹2,609.75, up 1.1% against the previous closing price of ₹2,579.70 on the BSE. However, the largecap stock soon pared gains and declined 2.2% to hit an intraday low of ₹2,523.45, while the market capitalisation slipped to ₹47,690 crore. The Adani Group stock has fallen as much as 3.3% from the day’s high of ₹2,611.

The shares of ACC touched its 52-week high of ₹2,759.95 on April 19, 2024, while it slipped to its 52-week low of ₹1,704.20 on April 28, 2023. The stock has risen 46% in the last one year; 33% in six months; and 13% in the calendar year 2024. In the last one month, the counter added 3.5%, whereas it rose nearly 6% in a week.

ACC released its fourth quarter earnings report on April 25 which showed that its consolidated net profit after tax (PAT) rose 300% to ₹945  crore as compared to ₹236 in the same quarter last year. The consolidated revenue from operations increased by 12.9% to ₹5,409 crore from ₹4,791 crore in the corresponding period last year.

On the operating front, EBITDA jumped 78.4% to ₹837 crore versus ₹469 crore in the same period last fiscal. The margin improved significantly to 15.5% in Q4 FY24 from 9.8% in Q4 FY23.

The improved performance is attributed to all round improvement in volume, cost and efficiency parameters, says the company. During the quarter under review, sales volume rose to 10.4 million tonnes (MT) from 8.5 MT in the year ago period.  

For the full financial year 2024, the company, a subsidiary of Ambuja Cements, posted “lifetime highest” annualised consolidated PAT at ₹2,337 crore, up 378 % from ₹886 crore in the previous fiscal. The revenue from operation stood at ₹19,959 crore as against ₹17,784 crore in FY23, while EBITDA rose to ₹3,062 crore from ₹1,290 crore in the previous fiscal. The total sales volume for the year increased to 36.9 MT versus 30.7 MT in FY23.

Ajay Kapur, Whole Time Director & CEO, ACC Limited, says, “We continue to solidify our position as a frontrunner in the cement industry. Our financial performance with jump in EBITDA by 138% during the year is a testament to the flexibility and strong foundation of our business model.”

The board of directors of the company has recommended a dividend on equity shares at ₹7.50 per share, which is consistent with last year's dividend on a 12 months basis.

Going ahead, the management of the company expects a positive outlook for the cement industry based on higher budgetary allocation to infrastructure and construction and government’s push for affordable housing along with green energy transition, demand-supply dynamics, and greater consolidation. Adani Cement will have the advantage of accelerated growth, lower cost, group synergies which in turn will help to sustainable performance & market leadership, it adds.

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