ACC Revenue Falls to 5,689 Crore Rupees as Operating Margin Slips to 7% in Second Quarter
Key Facts
Adani Group cement maker ACC reported revenue from operations of 5,689 crore rupees in the second quarter of fiscal 2026-27, down from 6,005 crore rupees in the year-earlier period. Operating EBITDA margin fell to 7.0% from 14.1%, the company said. Cement sales declined to 9.7 million tonnes from 10.0 million tonnes. The company said higher volumes under the supply agreement with Ambuja affected the comparison between the two periods. The results came as the company flagged higher energy costs during the quarter.
Non-recurring items affect the year-on-year earnings comparison, as the second-quarter results for the previous fiscal year included a reversal of an income-tax provision of 659 crore rupees for earlier periods, as well as interest of 205 crore rupees on an income-tax refund. These two items formed part of earnings in the comparable period, so the year-on-year profit decline should be viewed in light of their effect. The company’s public announcement did not provide the total costs cited in a separate media report. ACC’s statement also does not attribute the margin decline to a single factor, but cites higher energy costs among the quarter’s conditions. The company expects improved pricing to help offset higher fuel and energy costs.
In the sales mix, the trade share rose to 78%, up 7 percentage points year on year, while premium products accounted for 47% of trade sales. Blended cement accounted for 85%, compared with 78% in the year-earlier quarter. In related activities, ready-mix concrete posted quarterly volume of 1.07 million cubic meters, up 19% year on year. The figures point to an improved product mix alongside a contraction in total cement sales volume. The company continues to expand its ready-mix concrete business alongside its cement operations.
On the demand backdrop, Indian central government capital expenditure rose 18% to 5.1 trillion rupees during April to August of fiscal 2026-27, compared with 4.3 trillion rupees a year earlier. Chief Executive Vinod Baheti said industrial demand “remains supportive” and that he expects it to improve after the monsoon season, backed by housing, infrastructure and capital expenditure. He added that improved pricing could help offset higher fuel and energy costs. The company links its demand outlook to the end of the monsoon season, while government infrastructure spending is among the activity indicators cited in its statement. The company did not specify a date for when demand would improve.
Across the sector, cement companies faced higher costs for petroleum coke, coal and diesel during the September quarter, while seasonal demand weakness and intense competition limited their ability to pass increases on to customers, Reuters reported. Reuters said brokerages expected weak industry profitability for the quarter, with operating costs rising faster than cement prices. In the first fiscal quarter ended in June, ACC’s net profit fell 61.6% to 1.48 billion rupees, and revenue declined 8.1%, according to Reuters’ report on results for that period. ACC also booked an exceptional expense of 710 million rupees in the September quarter for voluntary separation benefits for permanent employees and third-party workers at various production facilities. These items provide context for the quarter’s decline in profitability, alongside the drop in revenue and margins reported by the company.
India is scheduled to release estimates for its September industrial production index on 28 October 2026, according to the Ministry of Statistics and Programme Implementation. The release follows ACC’s results and could add an official indicator for tracking industrial activity in the country. The company said cement demand is likely to improve after the monsoon season, supported by housing, infrastructure and capital expenditure. Its data also showed an increase in government capital expenditure during the first five months of the fiscal year. Those indicators remain part of the context the company provided for its demand outlook.