The management of Associated Cement Companies (ACC) held a conference call to discuss their quarterly and half-yearly results. The company mentioned that it owed its good performance in Q2 FY05 to better realizations and control over costs. Going forward, the company expects increase in realizations from November 2004 onwards. ACC management mentioned that the industry sailed through the monsoons without softening of prices, which is a good sign. Prices in east India have not moved up till now. They will improve in the coming months. Central and northern markets witnessed a higher correction in the monsoon season. Prices in south were the lowest during the period.
The subsidiaries contribution to growth was substantial. Its subsidiaries in east India have registered good growth resulting in good growth on a consolidated basis. ACC’s growth volumes were not visible due to south Indian market, which saw 7-8% decline in prices. The company’s operating margins declined by 20bps sequentially in Q2 FY05 to 16.9% due to increase in raw material prices. ACC said that it does not foresee any significant increases in coal prices in future. The company is in the process of buying a power plant from Tata Power for its requirements.
