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People work on the construction of a new berth at the Deendayal Port in Kandla, in the western state of Gujarat, India, April 5, 2025. REUTERS/Amit Dave/File Photo Purchase Licensing Rights, opens new tab
Oct 31 (Reuters) - Indian cement producer ACC (ACC.NS), opens new tab reported a second-quarter profit jump on Friday, as prices rebounded on-year and volumes came in higher than expected in a seasonally weak period.
Pre-tax profit was 7.57 billion rupees ($86.1 million) for July-September, more than double from last year. The company received a tax write-back of 6.71 billion rupees in the reported quarter.
Meanwhile, revenue rose 28% to 58.17 billion rupees, helped by a 16% rise in volumes. Data from at least five brokerages showed that the expected growth was between 4% and 14%.
Shares of the company rose 2% after results.
For further earnings highlights, click here.
KEY CONTEXT
Adani Group-owned ACC, Ambuja Cements (ABUJ.NS), opens new tab and larger rival UltraTech Cement (ULTC.NS), opens new tab have managed to shield their volumes from seasonal volatility, thanks to the string of deals inked in the sector recently, analysts said.
The quarter coincides with India's annual monsoon season, during which construction takes a hit and demand for cement sags, pressuring volumes and prices.
While cement prices were little changed sequentially, they were 5% higher from last year, Ambit Research data showed. During most of 2024, cement prices corrected from previous year's highs amid a drought of new projects exacerbated by India's general elections.
Analysts expect cement demand to recover in the second half of fiscal year 2026, as tax-cuts-spurred demand boost trickles in.
PEER COMPARISON
Valuation (next 12 months) | Estimates (next 12 months) | Analysts' sentiment | ||||||||
RIC | PE | EV/EBITDA | Price/Sales | Revenue growth (%) | Profit growth (%) | Mean rating* | No. of analysts | Stock to price target** | Div yield (%) | |
ACC | 16.97 | 9.21 | 1.35 | 10.17 | 0.28 | Buy | 20 | 0.88 | 0.40 | |
Shree Cement | 46.57 | 17.98 | 4.61 | 10.63 | 34.50 | Hold | 21 | 0.93 | 0.55 | |
UltraTech Cement | 34.42 | 19.34 | 3.69 | 13.10 | 34.26 | Buy | 37 | 0.88 | 0.64 | |
Ambuja Cements | 32.38 | 14.98 | 3.07 | 18.90 | 11.07 | Buy | 38 | 0.86 | - |
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 87.8950 Indian rupees
Reporting by Hritam Mukherjee in Bengaluru; Editing by Harikrishnan Nair
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