ACC Q4 earnings preview: Sales to shrink in double digits, margins to cushion profit

NEW DELHI: Cement maker ACC is expected to report a double-digit drop in sales, and lower single-digit fall in March quarter profit. Analysts said healthy cement prices during the quarter will restrict profits from falling much in the wake of production halt towards the fag-end of the quarter.

Emkay Global projects profit to fall 2.8 per cent year-on-year to Rs 232.20 crore from Rs 238.90 crore a year-ago. Brokerage Elara Capital sees a 3.8 per cent de-growth in profit at Rs 258 crore.

The cement producer will report March quarter earnings on Monday.

Centrum sees sales dropping 14.6 per cent YoY to Rs 3,289 crore from Rs 3,849 crore, thanks to a 13.9 per cent drop in sales volumes. Emkay expects sales to fall 10.6 per cent YoY to Rs 3,504 crore while Elara Capital sees a 10.8 per cent fall at Rs 3,432 crore.

Centrum said realisation will stay almost flat at Rs 4,789 per tonne compared with Rs 4,783 a year ago. The brokerage expects Ebitda margin to rise to 17.2 per cent from 13.5 per cent in the year-ago quarter.

Emkay does not see any material rise in Ebitda margin, which it sees at 13.6 per cent. It projectes Ebitda per tonne at Rs 721 vs Rs 700 YoY.

The cement industry witnessed a gradual uptick in demand and prices during Q4FY20. However, the government’s efforts to contain coronavirus outbreak have led to closing of cement factories since March 22-23, which has resulting in an abrupt halt to production and sales.

“Cement firms are likely to report a YoY fall in volumes, while healthy cement prices will limit YoY fall in earnings,” Elara said.