ACC, an Holcim-owned cement company, has reported 46 per cent fall in December quarter net profit at ₹56 crore (₹102 crore) due to lower realisation and fall in sales volume.
Net sales were down 6 per cent at ₹2,672 crore (₹2,846 crore).
The company has announced a dividend of ₹6 per share taking the total dividend payout for last year to ₹17.
The company has taken strong cost saving measures, especially on fuel flexibility and raw materials, said Neeraj Akhoury, who will take over as Managing Director and CEO.
Operating EBITDA for the quarter was down at ₹256 crore against ₹280 crore logged in the same quarter last year.
Sustained thrust on promotion of the company's range of premium products, including high performance varieties that come coupled with services led to 27 per cent increase in sale of these products during the year, said the company.
ACC expects the new Jamul plant to strengthen its market presence in eastern region.
Sales of most cement companies have been hit hard in the December quarter after the government’s decision to demonetise high value currency in November. The move has also impacted the financial health of real estate companies, depressing cement demand further.
Budget allocationHowever, the Budget has proposed to invest ₹3.96 lakh crore in infrastructure projects which should give a major boost to cement demand. However, the raw material cost has been rising putting pressure on companies.
The government has increased Budget allocation for building roads and highways to ₹64,900 crore from ₹52,447 crore.
Cement demand should also get a boost from the 8 per cent increase in allocation for railway expenditure to ₹1.31 lakh crore with plans to lay 3,500 km of railway lines next financial year against 2,800 km in 2016-17.
Cement demand from real estate should also improve with government assigning infrastructure status to affordable housing projects.
The slowdown witnessed post-demonetisation is easing and the economy is expected to show solid growth in the coming months, said the company.
Increased government spending on infrastructure development, housing, roads, railways, irrigation and other schemes announced in the Budget are expected to further reinvigorate the construction sector and boost demand, it added.
The company’s scrip was down 0.64 per cent to ₹1,426 on Friday.