High energy, material costs impact ACC's March quarter margins

Mumbai: Cement major ACC reported a sharp year-on-year decline in margins during the quarter ending 31 March as high material and energy costs weighed on the margins.

The company reported a consolidated bottom line of Rs 396 crore, down 30% year-on-year. Revenue meanwhile, grew marginally to Rs 4,427 crore.

“The January to March 2022 quarter was impacted due to the global rise in fuel costs driven by the overall geopolitical situation,” Sridhar Balakrishnan, the managing director of ACC said in a statement. The company’s efficiency and cost reduction actions under its project ‘Parvat’ helped partially offset the impact of higher input costs, he said.

The impact was clearly visible on the earnings before interest, tax, depreciation and amortisation (EBITDA), which declined by 26% to Rs 635 crore. EBITDA margin narrowed by 569 basis points to 14.3%.

The ACC stock declined 4.44% to close at Rs 2.057.9 on the BSE on Tuesday.

The cement maker is working on improving its energy efficiency with investment in waste heat recovery systems at its Jamul, Chattisgarh and Kymore, Madhya Pradesh plants. The ACC board has also approved the next phase of waste heat recovery projects at Chanda, Maharashtra and Wadi, Karnataka plants, the company said. With this, the company’s total capacity will reach 75 megawatts.

“We are confident that the demand situation will further improve in the coming months supported by an improving domestic economic environment and various initiatives from the government in terms of increased spending on infrastructure development,” the company further mentioned in the statement.