ACC posts marginal net on high raw material costs

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Mumbai, Apr 24: India’s largest cement maker, ACC Ltd, on Thursday, said that it has posted a marginal increase in its net profit to Rs 357.54 crore for the quarter ended March 31, 2008, compared to Rs 355.65 crore in the corresponding quarter last year. Sales turnover for the period stood at Rs 1,795.75 crore, up 7.2% against Rs 1,674.96 crore last year. ACC stock fell 5.49% on the Bombay Stock Exchange on Thursday to close at Rs 798.10. During the period, the company sold 5.40 million tonne of cement compared to 4.93 million tonne in the previous year. During the quarter, the company’s cost went up by 12% due to cost pressure in major inputs that include coal, gypsum, power and freight, along with an increase in coal prices by around 31%.

Addressing the company’s 72nd annual general body meeting (AGM), NS Sekhsaria, chairman of the company, said, “India has vast reserves of coal, yet we suffer for want of adequate supply of good quality coal. Import of coal is not viable for cement plants located in interior areas and added to this is the import duty on coal.”

The company further said that the excise duties on bulk cement and clinker were raised even though cement is already a highly taxed commodity. Despite all these unprecedented cost push factors, the company absorbed most of this escalation. Accordingly its cement prices went up by only 3% on a quarter-on-quarter basis. This is far lower than the increase in the cost of most other building materials over the same period.