Nifty Future tips
ACC shares fell 3.5% on Monday following the cement maker reported a 46% year-on-year drop in net profit between April to June 2015. ACC was top Nifty loser on Monday.
ACC reported a net profit of Rs. 131 corer on sales of Rs. 2,961 corer as against net profit of Rs. 241 corer on sales of Rs. 3,009 corer in the corresponding quarter of last year.
Cement volumes dipped by 2% , while realization per tonne also declined, striking bottom line. Pricing in all markets except South India was weak, resulting in lower realization for the company.
"ACC reported only a marginal 2.4% year-on-year decline in volume whereas realization fell 8% quarter-on-quarter versus our estimate of only a 3% drop, leading to sharp earnings disappointment," said brokerage Nirmal Bang Securities.
Operating costs rose on account of higher freight costs. Despite tumbling diesel prices, railways freight rates were higher, which coupled with higher lead distance led to higher freight costs, Nirmal Bang said. Other prices, such as power and fuel costs, were to higher.
"With local coal supply getting expensive, we expect power and fuel costs to rise going forward," Nirmal Bang said.
Other cement makers also declined tracking ACC earnings. Prism Cement traded 4.2% lower, while Ambuja Cements traded 1.6% down. Ultratech traded 1.5% lower.
As of 09.36 a.m., ACC traded 3% lower at Rs. 1,442 in a market that was down 0.3%.