Angel Broking, ACC – 1QCY2011- results review

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ACC – 1QCY2011
For 1QCY2011, ACC posted 14.1% yoy growth in its net sales to `2,398, aided by growth
in volumes and higher realisation. The company’s dispatches for the quarter stood at
6.16mn tonnes, up 10.4% yoy. Growth in dispatches was aided by pick-up in demand
across the country during the quarter and due to the increase in the company’s capacity.
Realisation also improved by 3.4% yoy to `3,893/tonne, resulting in healthy top-line
growth. On a qoq basis, net sales were higher by robust 22.5% on account of 11.4%
improvement in realisation coupled with 10% growth in dispatches. However, the company
faced margin pressure during the quarter on account of increased power and fuel costs,
freight costs and costs of raw materials such as fly ash and slag. OPM for the quarter
declined by 708bp yoy to 24.2%. ACC’s net profit fell 13.4% yoy on account of lower
operating profit and higher interest and depreciation costs. We remain Neutral on the
stock as we believe it is fairly priced.