ACC Ltd, a key player in the Indian cement industry, reported a 20.4% year-on-year decline in net profit for the March quarter, falling to Rs 751.04 crore. Despite this, the company's revenue from operations grew by 12.7% to Rs 5,207.3 crore. The cement maker, now part of Adani Cement, achieved a record-high sales volume of 11.9 million tonnes, reflecting strong demand in the housing and infrastructure sectors. For the full fiscal year, ACC posted a modest profit increase of 2.87%. Looking ahead, the company anticipates continued growth driven by ongoing infrastructure projects and favorable government policies.
Disappointing Profit Decline in Q4
ACC Ltd’s performance for the March quarter of FY25 was a mixed bag, with a notable decline in net profit, which fell by 20.4% to Rs 751.04 crore. In the same quarter the previous year, the company had posted a profit of Rs 943.39 crore. Despite this decrease, ACC’s revenue from operations rose by 12.7%, amounting to Rs 5,207.3 crore. This is slightly lower than the previous year’s revenue of Rs 5,316.75 crore, underscoring a slight contraction in sales despite higher volumes.
ACC’s total expenses during the quarter also rose by 13.11%, reaching Rs 5,514.82 crore, which further squeezed profitability. The company’s cement business showed growth, but its cost structure continues to face inflationary pressures.
Record Sales Volume and Growth in Key Segments
In a silver lining, ACC achieved a record sales volume of 11.9 million tonnes during the quarter, marking a significant 14% growth. This was described by the company as the highest-ever sales volume in a quarter. Cement revenue also showed positive performance, with a year-on-year increase of 11.14%, reaching Rs 5,685.53 crore.
Further bolstering its growth was a strong performance in its ready-mix concrete business, which posted a revenue of Rs 419.92 crore, a 32.12% increase compared to the previous year’s quarter. These figures illustrate ACC's ability to capture increased demand in the housing and infrastructure sectors, which have been buoyed by government spending and a resurgence in rural and real estate demand.
Solid Annual Performance Amid Challenges
For the fiscal year ending March 31, 2025, ACC reported a modest 2.87% growth in net profit, which totaled Rs 2,402.27 crore, compared to Rs 2,337 crore in FY24. The company’s total income for FY25 reached Rs 22,834.74 crore, up by 11.65% from the previous year’s Rs 20,451.77 crore.
This year-on-year growth in revenue and profit reflects the resilience of ACC amidst broader market challenges. ACC’s ongoing expansion plans and modernization initiatives, including the commissioning of new grinding units and the implementation of capacity debottlenecking, have been pivotal in sustaining growth despite fluctuating raw material costs and inflationary pressures.
Strategic Milestones and Future Outlook
Vinod Bahety, ACC’s Whole-Time Director & CEO, highlighted the company’s strategic milestones, which are reinforcing its leadership in the Indian cement industry. The company’s capacity expansion and modernization efforts, along with an increased focus on quality and efficiency, have positioned ACC to meet the growing infrastructure demand in India.
Looking ahead, ACC is optimistic about its growth trajectory for FY26, projecting a 7-8% increase in revenue. The company attributes this growth to sustained demand in the housing and infrastructure sectors, along with favorable policy support from the government’s pro-infrastructure and pro-housing budget for 2025.
The cement consumption during Q4 FY25 grew by 8%, slightly higher than the previous quarter’s 7%, driven by improved construction activity, a recovery in rural demand, and increased government spending on infrastructure projects.
Dividend Announcement and Shareholder Value
In line with its strong financial performance, ACC’s board of directors has approved a dividend of Rs 7.50 per equity share, marking a significant return to shareholders. This dividend declaration is part of the company’s ongoing strategy to balance capital expenditures with shareholder returns amid an ambitious growth plan.
ACC’s share price closed at Rs 2,068 on the BSE on Wednesday, reflecting a modest increase of 0.79% from the previous day’s close. This growth in share value highlights investor confidence, despite some of the challenges faced by the company in the March quarter.
Conclusion: A Positive Outlook Amidst Challenges
While ACC’s Q4 results showed some profit compression, the company’s long-term outlook remains strong. With record sales volumes, strategic capacity expansions, and a positive demand forecast driven by government infrastructure spending, ACC is poised for continued growth in FY26. The company’s ability to adapt to market conditions and maintain a diversified portfolio of cement and ready-mix concrete products positions it well for the future, even as it navigates cost pressures and market fluctuations.
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