A section of cement analysts say that while realizations are a bit higher than the year-ago period, it is lower than expectations by around Rs90-100 per tonne. Exposure to Uttar Pradesh and southern markets, where prices were lower, could be one of the reasons.

Other expenditure, which analysts reckon to be payment towards consultancy charges as well as discounts, has increased total expenses. As a result, the operating profit, which was higher year-on-year (y-o-y) by around 6%, dropped 32% sequentially to Rs466 crore in the December quarter. Operating profit margins, too, fell sharply from 33% to 23% during the sequential periods.

Graphic: Ahmed Raza Khan / Mint

It’s not surprising then that the net profit in the last quarter dipped both sequentially and y-o-y to Rs242 crore. ACC closed 2009 with earnings per share of Rs83, compared with Rs58 in the previous year.

ACC’s share price fell 3% on Thursday to Rs856. While some analysts believe this could be the rock bottom in terms of performance for ACC, how soon it would recover depends on the revival in cement prices. January has indicated a marginal rise in prices across the country, but capacities are expected to be commissioned through the current year, which may lead to stagnation in prices.

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