Cement majors ACC and Ambuja stocks down on poor quarterly results
Cement majors ACC and Ambuja Cements are trading 3% down after reporting losses in quarterly earnings.
MUMBAI: Shares of ACC and Ambuja Cements fell around 3% on Friday, after the cement majors reported quarterly earnings a day before.
ACC's net profit for January-March fell by almost half to Rs 155 crore after it changed its system of accounting for depreciation, dealing a one-time blow of Rs 355 crore on its accounts. Ambuja Cements reported a 27% decline in net profit to Rs 312 crore.
As a result, both the cement stocks, which constitute key benchmark indices, are trading down. Ambuja Cements was trading at Rs 160.40 (2.6% down) on BSE and ACC at Rs 1,209.90 or 3% down, at 1305 hours on Friday.
Sensex was at 17,463 points, 0.23% down. "ACC has corrected nearly 10.5% since our last recommendation due to steep volumes, continued cost pressures and fears of CCI imposing fine on cement companies," said Kotak Securities analyst Teena Virmani in a post-results note to clients.
CCI or Competition Commission of India had indicated penalising cement companies for allegedly colluding together to influence product prices. "We continue to maintain REDUCE recommendation for the company with a revised target price of Rs 1,235," Virmani said.
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