ACC Limited (NSE: ACC), a leading player in the Indian cement industry, has reported a strong performance in the third quarter of the fiscal year 2022-23 (Q3FY23). The company’s net revenue saw an increase of 14% quarter-on-quarter (QoQ) to Rs 4,537 crore and its volume also rose by 12% to 7.7 million tonnes (MT) during the same period.
One of the key factors that contributed to Acc’s strong performance was the reduction in costs. The company achieved a reduction of Rs 368 per MT, from Rs 5,738 per MT in the previous quarter to Rs 5,370 per MT in Q3FY23. This reduction in costs was the result of the company’s focus on cost optimization and leveraging synergies with the Group’s adjacencies.
As a result of cost reduction and higher demand for cement due to a pickup in construction activities, Acc’s earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped from Rs 124 per MT to Rs 542 per MT QoQ. The company also reported a positive profit after tax (PAT) of Rs 113 crore, compared to a negative PAT of Rs 87 crore in the previous quarter.
Acc’s strong financial performance was attributed to various factors such as improvement and expansion of its dealer network to serve the nearest markets, higher demand for cement due to a pickup in construction activities, and its relentless focus on operational excellence. The company’s CEO, Mr. Ajay Kapur, stated that he sees a continuation of elevated demand and strong volumes in the coming quarters as the rise in construction activities across its markets continues.
In addition to its strong financial performance, Acc also made significant progress in its operational excellence initiatives. The company’s alternate fuel and raw material (AFR) consumption volume increased by 33% due to various debottlenecking initiatives and a strong focus on cost optimization. Acc also successfully commissioned waste heat recovery systems (WHRS) at Kymore and Jamul, while the expansion of its Ametha Integrated Unit will be completed by the second quarter of the fiscal year 2024. At the end of the quarter, Acc had cash and cash equivalents of Rs 2,835 crore.