ACC – Margin Under Pressure Q3-09 Review

ACC’s Q3CY09 results were in line with our expectations. The company’s topline rose 9% YoY to Rs 19.6bn, driven by a 6% YoY increase in realisations and a 3.1% growth in volumes.

ACC’s EBITDA margins expanded 963bps YoY to 33.9% on account of higher realisations and lower power and fuel costs. However, on QoQ basis, the company’s margins contracted 139bps. The company posted an EBITDA/tonne of Rs 1,333 during the quarter.

ACC’s capacity expansion at Bargarh is expected to add 1.1mn tonnes to its existing capacities. Moreover, the New Wadi expansion project is likely to be commissioned in phases from the third quarter until Q1FY10.

ACC’s EPS is expected to FALL in CY-2010.