ACC Q1 FY26 Results (NSE: ACC)
Signal: Revenue declined
The read
Q1FY26 marks a sharp deterioration: revenue declined 8.6% YoY (first decline in 4 quarters) and OPM halved to 3.9% (-500bps YoY) — 2nd consecutive quarter of margin contraction. The company temporarily suspended operations at some facilities, indicating demand weakness and cost rationalisation. The only bright spot is RMC segment growth (+20.4% YoY), but it is too small to offset the cement drag. PAT at ₹147 Cr is the lowest quarterly profit in the last 12 quarters (excluding Q2FY25). The pending merger with Ambuja adds execution uncertainty.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹5,740 Cr | -8.6% | -19.4% |
| EBIT | ₹222 Cr | -60.4% | |
| Net profit | ₹147 Cr | -60.8% | |
| EPS | ₹7.83 | -60.8% | |
| EBIT margin | 3.9% |
P&L walk
Revenue fell sharply YoY (-8.6%) and QoQ (-19.4%) to ₹5,740 Cr, driven by lower volumes as the company temporarily suspended operations at some facilities. Gross margin compressed significantly: cost of materials consumed + purchases + change in inventory as % of revenue rose to 46.1% from 41.8% a year ago (+430bps), reflecting input cost pressure and adverse mix. EBITDA margin eroded to 8.4% (-420bps YoY) as power & fuel (13.7% of rev, +60bps) and freight (18.2%, +10bps) remained elevated. Operating leverage is absent: revenue declined, so Gate 1 fails. A ₹24 Cr exceptional VSS charge further depressed profit. Net profit fell 60.8% YoY to ₹147 Cr, with EPS of ₹7.83.
Key positives
- RMC segment revenue grew 20.4% YoY to ₹501 Cr, with segment profit doubling to ₹29 Cr.
- Finance costs remained low at ₹27 Cr (-10% YoY), reflecting minimal debt (D/E 0.02x).
- Tax rate decreased to 26.5% from 33.4% YoY, providing some PAT support.
Key concerns
- Consolidated revenue fell 8.6% YoY to ₹5,740 Cr, the first decline in 4 quarters, driven by temporary plant shutdowns and weak demand.
- OPM contracted 500bps YoY to 3.9% — 2nd consecutive quarter of margin contraction; gross margin proxy (COGS % of revenue) worsened by 430bps.
- Exceptional VSS charge of ₹24 Cr further depressed profitability.
- PAT at ₹147 Cr (-60.8% YoY) is the lowest quarterly profit in the last 12 quarters barring Q2FY25.
- Pending merger with Ambuja Cements creates operational and regulatory overhang.
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