Analysts cheered ACC Ltd.’s efforts to cut costs and plans to expand capacity, as most of them hiked price targets on the cement maker after the first quarter.
The LafargeHolcim subsidiary, which follows a January-December fiscal, posted a net profit of Rs 563 crore in the quarter ended March, a 74% jump over the year earlier, according to an exchange filing. Its revenue rose 23% to Rs 4,213 crore.
The company sold 8 million tonnes of cement in the reported quarter, a 21.6% year-on-year rise in volumes.
ACC’s capacity utilisation stood at 90% during the three months ended March.
It has 17 cement plants with an installed capacity of 34.45 million tonnes per annum.
ACC also commissioned a new grinding unit at Sindri Industrial Township in Jharkhand’s Dhanbad, adding a capacity of 1.4 million tonnes per annum.
The cement maker, in its statement, said it maintains a cautious yet positive outlook for overall cement demand in the coming months, with the government’s increased spending and its strong focus on infrastructure development.
Analysts also maintained their bullish investment recommendations for ACC, while some see its merger with Ambuja Cements Ltd. as a positive. Of the 44 analysts tracking the company, 31 have a ‘buy’ rating, six suggest a ‘hold’ and seven recommend a ‘sell’, according to Bloomberg data. The average of the 12-month consensus price target implies an upside of 10.6%.
Shares of ACC, however, erased gains of as much as 5.6% to trade with losses.