Stock Market

Share Price Of ACC Drops Over Eight Percent After Cement Maker Reports Less-Than-Expected Results

The share price of ACC dropped more than 8 percent on October 19, 2018, trade after the cement producer announced not as much as expected outcomes for the September quarter on October 17, 2018.

“ACC’s inability to increase prices despite robust volume trend and spiraling costs is disheartening,” Edelweiss Securities said. The cement producer had announced Rs 182 crore benefits in the comparing quarter a year ago. The stock fell 8.2 percent to hit a low of Rs 1,413 on BSE.

Consolidated net sales rose 10 percent to Rs 3,364 crore contrasted and Rs 3,054 crore a year ago.

Ebitda came in at Rs 444 crore, up 7 percent over Rs 416 crore in the year-prior period. Volume development for the cement segment remained at 10 percent and for ready mix concentrate at 12 percent.

The organization detailed a 15 percent year-on-year increment in the share price of ACC consolidated net benefit at Rs 209 crore. Analysts had pegged net benefit at Rs 251.53 crore. Net sales grew 10 percent at Rs 3,364 crore on the back of an equivalent percentage growth in cement volume.

Brokerage Emkay Global said ACC’s reports for balanced EBITDA was lower than appraisals as lower acknowledgment influenced edges. Be that as it may, the financier has kept up a buy rating on the stock because of sensible valuations (10.4x CY19E EV/Ebitda) and a solid balance sheet, Economic Times reported.

The organisation said that it will keep its attention to work on efficiencies to enhance execution. “Demand drivers including growth in affordable and rural housing segments as well as infrastructure projects will remain healthy. We are optimistic that cement demand growth will strengthen in the coming year,” it said.

The brokerage said about the share price of ACC, “Despite monsoons blowing over and a sustained rise in variable costs, the absence of a price hike is likely to be a near-term overhang for the stock. That said, we maintain the positive view on ACC building in benefits of continued demand growth and an imminent rise in industry clinker utilization.”

[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]
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