ACC jumps 5% as Q4 volume growth beat Street expectations

NEW DELHI: Shares of ACC soared nearly 5 per cent in trade on Monday even as the cement major reported a 9.05 per cent YoY drop in consolidated net profit to Rs 211 crore for the March quarter.

The company had reported a net profit of Rs 232 crore in the corresponding quarter last year.

The spurt was seen as some brokerages suggest the volume growth for the quarter at 4 per cent was better-than-expectations.

“While part of this could probably be explained by the recent capacity additions, strong recovery in demand post DeMon is expected to have further aided it,” said Edelweiss Securities.

Following the announcement, the stock rose 4.71 per cent to hit a high of Rs 1,567.25 on BSE.

The company said its profit before tax (PBT) fell to Rs 261 crore for the March quarter, compared with Rs 326 crore in the year-ago quarter. Net sales for the quarter rose to Rs 3,108 crore for the quarter, up 7.77 per cent YoY over Rs 2,884 crore reported in the year-ago quarter.

“We believe ACC will be a mid-cycle beneficiary of the anticipated sector upturn. On our estimates, the company’s RoE will rise to nearly 12 per cent by CY18E from 7 per cent in CY16. Based on our valuation framework, we estimate target price of Rs 1,685 (Rs 1,648 earlier),” Edelweiss Securities said.