Earnings impact: ACC shares fall 7% in two days
States would like to have their share of revenue and growth and unless there is an agreement between the two centres of power, economic reforms would go into cold storage for longer than 2014.
Shares of ACC, India's second biggest cement manufacturer, have fallen nearly 7% over the last two sessions on the back of weak first quarter earnings. At 10.30 am, the stock traded 3.1% lower at Rs 1,208 on the BSE, while the Sensex was flat at 17,498, down 7 points or 0.04%.
Analysts said ACC’s realizations grew by 1% on a sequential basis (QoQ) to Rs 213 per bag, which was a big disappointment.
Brokerage firm CLSA said it is yet to understand the reason for such moderate rise in realizations. The stock has corrected on realization-led negative earnings surprise, CLSA added.
ACC reported net profit of Rs 152 crore for the March quarter compared with Rs 350 crore a year earlier on the back of a retrospective change in depreciation method. Net profit would have been Rs 380 crore under the earlier method, the company said.
Higher costs of fuel and transportation also squeezed margins even as sales volumes rose.
Ambuja, India's third biggest cement producer, reported a 23% fall in net profit to Rs 312 crore for the first quarter ended March 2012, compared with Rs 407 crore a year earlier. The drop was mainly due to a retrospective change in depreciation on captive power plants which resulted in an additional charge of Rs 289 crore.
ACC and Ambuja, both 46% owned by Switzerland's Holcim, the world's second-largest cement producer, along with rivals Jaiprakash Associates and Ultratech account for around 50% of the cement produced in India.
(With inputs from Reuters)