BENGALURU (Reuters) – Indian cement maker ACC on Monday posted first-quarter profit that missed analysts’ estimates, hurt by a weak demand and price cuts.
The Adani Group-owned company said its profit after tax stood at 3.66 billion rupees ($43.7 million) for the quarter ended June 30, while analysts were expecting a profit of 4.17 billion rupees as per LSEG data.
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KEY CONTEXT
General elections in India, as well as extreme heat conditions during the April-June quarter restricted construction activities, impacting sales volumes for cement makers who have been resorting to price cuts to reduce the impact of competition.
The company reported a volume growth of 9%, which was much below the 16.5%-23.5% range of volume growth in the previous four quarters.
India’s largest cement maker UltraTech Cement also reported first-quarter profit and revenue below the estimates due to lower prices and a demand lull.
Adani-owned cement maker Ambuja Cements is set to report earnings on Wednesday.
PEER COMPARISON
Valuation (next Estimates(next 12 Analysts’ sentiment
12 months months)
RIC PE EV/EBIT Revenue Profit Mean # of Stock to Div
DA growth % growth % rating analysts price target yield
(%)
ACC 20.81 11.93 7.21 8.57 BUY 18 0.92 0.29
Ambuja Cements 45.79 18.77 10.76 30.05 BUY 22 1.02 0.30
UltraTech Cement 42.30 21.03 9.58 19.72 BUY 34 1.00 0.61
Shree Cement 35.92 17.78 8.78 14.19 BUY 16 0.97 0.38
* 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
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 83.6950 Indian rupees
(Reporting by Anisha Ajith in Bengaluru)
