ACC Limited, also known as the Associated Cement Companies Limited, is one of the largest producers of cement and ready mixed concrete in India.
The market cap of ACC, as of March 2018, is more than Rs.29,000 crore.
Company’s Wealth and Recent Performance
Q2 FY 2018-19
- For the April-June quarter of the calendar year 2018, the company reported a 7% increase in the cement sales volume, y-o-y. The cement sales for the quarter stood at Rs.7.24 million tonnes. As for the concrete sales, they grew by 22% y-o-y.
- Considering the consolidated total income for the April-June period, the figure stood at Rs.3,880 crore, as against Rs.3,671 crore reported for the previous quarter. However, in comparison to the same period of the previous year, the sales dropped marginally by a little over Rs.100 crore.
- The consolidated profit before tax for the period stood at Rs.483 crore whereas the profit after tax stood at Rs.329 period. In comparison to the same period of the previous year, there hasn’t been a significant change in the two figures.
- Considering the company’s basic earnings per share (EPS), the figure improved marginally from Rs.17.37 to Rs.17.50 y-o-y.
Q1 FY 2017-18
- For the quarter ended on March 31, 2018, ACC Limited reported its cement sales volume to be at 7.11 million tonnes, as against 6.60 million tonnes reported for the same quarter of the previous year. A similar rise was also witnessed in the ready-mix concrete segment, with the figure jumping from 0.72 million tonnes to 0.84 million tonnes, y-o-y.
- Considering the consolidated net sales for the January - March period, the figure stood at Rs.3,557 crore. The profit before tax for the quarter was stated to be Rs.376 crore - an increase of a little over 35% y-o-y. The consolidated profit after tax for the period was stated to be Rs.250 crore, as against Rs.211 crore for the same period last year.
- The company’s basic earnings per share grew from Rs.11.24 to Rs.13.33, y-o-y.
Q4 FY 2017-18
- The sales volume for cement in the October-December quarter of 2017 rose to 6.92 million tonnes, from 5.45 million tonnes in the corresponding quarter last year. Similarly, the sales volume for ready mixed concrete also grew to 0.87 million cubic metres from 0.67 million cubic metres, Y-o-Y.
- Net sales for the final quarter were reported to be at Rs.3,417 crore, in contrast to Rs.2,625 crore reported in the same quarter of 2016. This translates into a roughly 30% increase. Operating EBITDA also grew by 54% in the same period to Rs.443 crore.
- ACC’s profit before tax surged by more than 200% to Rs.301 crore in the last quarter. This figure, for the entire 2017, stands at Rs.1,310 crore, in comparison to Rs.885 crore reported in Jan-Dec, 2016. Consequently, the profit after tax stood at Rs.206 crore for the final quarter and Rs.925 crore for the year 2017.
- The company’s total assets, as of December 31, 2017, is Rs.14,845.74 crore.
ACC Stock Trends in 2018
- The opening price of ACC shares at the start of January 2018 was Rs.1,763.95 on NSE. The stock price increased gradually in the first half of the month, crossing Rs.1,800. However, the rally lasted only till the final week of January as the share price started to fall thereafter. The closing price at the end of the month was Rs.1715.25 on NSE.
- The stock price declined further in February owing to weak global cues and turbulence in international markets. The price had plunged to Rs.1,600 levels and it spent the rest of the month in futile attempts to recover its previous gains. ACC share price, on February 28, 2018, was Rs.1,623 on NSE.
- The ACC Limited shares commenced the month of March trading at Rs.1,624. The scrip moved on to shed marginally over the course of the month to descend into the Rs.1,500 region. The closing price of the scrip on March 28 was Rs.1,507.5. Throughout the course of April, the ACC share price fluctuated at levels varying from Rs.1,530 - Rs.1,580.
- The month of May proved to be quite disappointing for the investors. The shares shed a little over 15% over the course of the month to descend into the Rs.1,300 region. A final dividend of 150% was announced in the same month, although it didn’t do much to help the shares gain some momentum. On May 31, the shares finished trading at Rs.1,354.60.
- June was an uneventful month for the investors. The shares didn’t make any exceptional gains as the scrip tried to find its bearings at levels above Rs.1,300. However, the attempts were quite futile and on several occasions, the shares dipped into the Rs.1,200 region. The shares managed to recover marginally in the first week of July, but only to follow it with a steady dive. On July 17, the shares hit their 52-week low at Rs.1,255.65.
- In the final week of the July, however, the shares recovered splendidly to revisit their previous levels at Rs.1,500. The scrip gained more than 15% in little over a week and by early August, the shares were trading at levels above Rs.1,530. In the second half of the month, the shares appreciated further and the price moved into the Rs.1,600 region.
- As of September 14, the shares were seen trading hands at levels above Rs.1,590.
ACC Stock Trends in 2016 and 2017
- At the start of January 2016, ACC stocks were being traded at around Rs.1,340-1,360 on NSE and BSE. By the end of the month, the stocks had lost considerably and entered the Rs.1,200 territory. Throughout the month of February, ACC shares stayed above Rs.1,200 without any major changes. A final dividend of 60% was also announced in the month. Things took a turn for the better in the second half of March as the share price crossed Rs.1,350.
- The rally continued through April with the ACC stock price crossing Rs.1,400 on the major stock exchanges. Things did not change much through most of May as the stocks were being traded at values well above Rs.1,400. The share price soared in late May and crossed Rs.1,500. This uptrend continued till June, when the stocks made new gains and managed to reach Rs.1,600 by the end of the month.
- ACC share price continued to increase through the month of July as well. On a couple of occasions, the price did cross Rs.1,700, although it failed to find stability at that level. In August, an interim dividend of 110% was announced and this in conjunction with performance updates, kept the share price steadily above Rs.1,600. In September, the stocks exhibited signs of a downward trend and the closing price on September 30 was Rs.1,599.85 on NSE.
- In October, the share price plunged dramatically and entered the Rs.1,500 territory. Things did not improve in November either as the demonetisation led the stocks to incur more losses. By mid-November, ACC stocks were being traded at levels above Rs.1,300 with the closing price at the end of the month being Rs.1,342.40. The stocks gained slightly in the first half of December, only to shed it in the second half. The closing price at the end of December 2016 was Rs.1,331.05.
- The start of January 2017 was an uneventful one for the investors as things did not change much. It was in the second half that the stock price started to move up and this uptrend continued through the first half of February. However, in the second half of the month, the stocks shed their recent gains and were back to being traded at around Rs.1,400-1,410 on NSE and BSE. In March, the company announced a final dividend of 60% which did not do a lot to boost investors’ confidence. The closing price at the end of the month was Rs.1,446.05.
- The stocks commenced an upward run in April which continued through the first half of May. A strong performance by the company and regular updates helped the stock price surge steadily and by the end of April, the share price had crossed Rs.1,600. In May, the stocks were inching towards Rs.1,700 and it managed to cross this limit, albeit only for a short while. The shares shed their recent gains over the course of next few weeks. June was not that eventful for the investors and the closing price at the end of the month was Rs.1,568.05 on NSE.
- The share price soared again in July and once again, it crossed Rs.1,700. An interim dividend of 110% was also announced in the final week of the month. In August, ACC stock price crossed Rs.1,800 and through the first half of September, the shares changed hands at levels well above this value. However, in the second half of the month, the stock price took a massive nosedive and entered the Rs.1,500 territory by the end of the month.
- The stocks recovered their previous losses in October and had managed to make decent gains by early November. But thereafter, stocks entered into a downward trend. However, the losses this time were not as bad as the previous ones and the closing price at the end of the year was Rs.1,758.40.
Should you invest in ACC?
- India is undoubtedly among the fastest growing economies in the world. The infrastructure sector in the country has played a key part in this and will continue to do so in the years to come. When we consider this with the government’s affordable housing initiative, it becomes clear that the demand for raw materials like cement is going to increase in the future. ACC, being one of the largest cement players in the country, is strategically placed to meet this demand.
- At the same time, there are other players in the cement industry whose turnover and net profit are better than that of ACC. For example, UltraTech Cement, the largest exporter and manufacturer of cement in the country, is best positioned among all the players to benefit from the cement sector upturn and the growth in demand. Therefore, if you are looking to invest in this sector to diversify your portfolio, there are other players to consider.
- ACC Limited has been around the block for more than 50 years and needless to mention, its foundations are strong. The company has generated steady profits over the years and from a long-term perspective, investing in ACC may appear to be a feasible idea. However, it is advisable to conduct your own research before investing. Alternately, you can also look into mutual funds which have holdings in this particular stock.
ACC Limited is one of the largest manufacturers of cement India and is considered to be a benchmark in cement and concrete industry since its establishment in 1936. The company has 17 state-of-the-art cement factories and 57 ready mixed concrete plants, and has a distribution network comprising 21 sales office, more than 10,000 dealers across the country, 50,000 retail outlets and a workforce of 7,800 people. ACC Limited is deeply committed to sustainable development and making its business more planet-friendly which is evident from its pollution control equipment installed in each of its cement plants. It is also worth noting that ACC Limited is the only cement company in India to have the coveted Superbrand status.
History of the Company
The Associated Cement Companies was incorporated on August 1, 1936, when 10 cement companies belonging to the likes of Tata Group, Khatau Group of Companies, F.E Dinshaw Groups and many more came together to form a single cement entity. The company had its first board meeting in November 1936, which was soon followed by the construction of a new head office in Mumbai. In 1947, ACC Limited set up its first indigenous cement plant at Chaibasa, Bihar. Over the course of next couple of decades, the company expanded its cement operations by setting up depots, training institute and research centre in the country. It also started manufacturing different types of cement like Portland Cement, High Alumina Refractory Cement, et cetera. Towards the end of the 20th century, ACC Limited established additional plants to boost its production capacity and also commenced the production of ready mixed concrete.
Mr. N.S. Sekhsaria - Chairman, ACC Limited
Mr. Sekhsaria is the Chairman of the Board of Directors and also serves as a Non-Executive and Non-Independent Director. He is undoubtedly the most respected figure in the Indian Cement Industry and is considered to be a pioneer. He is a first generation industrialist who got a Bachelor’s degree in Chemical Engineering with Honours from the University of Bombay. He is the founder, promoter and the current chairman of the Ambuja Cements Limited. Mr. Sekhsaria joined the Board in 1999 and in January, 2000, he was appointed as the Deputy Chairman. He became the Chairman of the Board in 2006. Under Mr. Sekhsaria’s leadership and guidance, ACC Limited has made considerable strides in project management, logistics, and improving overall cost-efficiency.
Mr. Neeraj Akhoury - Managing Director & CEO, ACC Limited
Mr. Akhoury serves as the MD, Chief Executive Office and a Non-Independent Director. He has held several key positions in cement and steel industries and has substantial experience in understanding and governing these sectors. He started his journey in 1993 with Tata Steel and in 1999, he joined the Lafarge Group. His most recent stint with the LafargeHolcim Group was as the CEO of Lafarge Surma Cement Limited, in addition to serving as the country representative of LafargeHolcim Bangladesh. Mr. Akhoury has a degree in Economics and has completed a one-year management program at XLRI, India. He is also an alumnus of Harvard Business School.
ACC Limited Stock Listings in BSE, NSE and Indices
ACC Limited equity shares can be bought and sold on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. The codes for the same are as follows:
BSE - 500410
NSE - ACCEQ
ISIN - INE012A01025
SECTOR - Cement, Major
The company comprises several crucial stock market indices in India, some of which are listed below:
- NIFTY 100
- NIFTY 200
- NIFTY 500
- S&P BSE 200
- S&P BSE 100
- S&P BSE LargeCap
- S&P BSE SENSEX Next 50
121, Maharshi Karve Road,
Mumbai - 400-020,
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