India's ACC Q3 profit plunges on higher costs, stagnant volumes
BENGALURU, Jan 31 (Reuters) -Adani Group-owned ACC Ltd ACC.NS on Tuesday reported a more than 60% drop in quarterly profit on higher costs, flat cement prices and stagnant volume growth.
Standalone profit after tax fell to 1.10 billion Indian rupees ($13.46 million) for the three months to Dec. 31, from 2.80 billion rupees a year earlier, while total revenue from operations grew 7.4% to 45.37 billion rupees, the cement maker said in an exchange filing.
ACC's total expenses rose 13.2% to 43.49 billion rupees during the quarter, driven by higher freight, input as well as power and fuel costs.
Freight costs were hit after the Indian Railways reintroduced a 'busy season' surcharge at 15% in October 2022, after a gap of three years.
Freight and fuel expenses usually form at least 50% of total expenses for the Indian billionaire Gautam Adani-owned firm. Fuel cost is expected to further reduce in the coming months, the company said in a statement.
Sales volume stood at 7.7 million tonnes for the quarter, flat from a year ago.
In Himachal Pradesh, due to the transport unions' unworkable position on the freight rate and distribution model, the company decided to temporarily suspend operations at its Gagal plant, ACC said.
Indian ports-to-energy conglomerate Adani Group ventured into cement making last year with its $10.5 billion acquisition of Holcim AG's HOLN.S cement businesses in India - Ambuja Cements Ltd ABUJ.NS and ACC.
Last week, top industry player Ultratech Cement Ltd ULTC.NS also reported a decline in quarterly profit.
Ambuja Cements is expected to report results on Feb. 7.
ACC shares have fallen over 15% since last week when U.S. short seller Hindenburg Research's scathing note on Adani Group companies wiped away $65 billion in market capitalisation from its seven listed entities.
($1 = 81.7520 Indian rupees)
Reporting by Nandan Mandayam in Bengaluru; Editing by Shailesh Kuber
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