ACC drops on muted dispatches growth in December 2006

Cement major ACC dropped 1% to Rs 1080.50 after the company reported a muted 3.1% growth in cement dispatches for the month just gone by.

Just before the news of its dispatches figures hit the market at about 11:00 IST, the stock was hovering in the green. In early trade, the stock had risen as much as 1.1% to a high of Rs 1105.1.1 lakh shares changed hands in the counter on BSE.The stock had bounced back from lower level in the past few days on expectations of strong results for the quarter ended December 2006. From Rs 972.35 on 12 December 2006, the scrip had surged 12.3% to Rs 1092.40 by 2 January 2006.

ACC said on Wednesday its December 2006 shipments rose 3.1 percent to 1.65 million tonnes from 1.60 million tonnes a year ago. The company said production in December totalled 1.63 million tonnes, up from 1.57 million a year ago.

ACC is expanding capacity at its Wadi (Karnataka) plant by 3 million tonnes a year, at a cost of Rs 1,480 crore. Apart from the new Wadi plant, ACC is gearing up to capture the boom in the cement industry by increasing its capacity by 2.9 million tonne per annum in Gagal (Himachal Pradesh), Lakheri (Rajasthan) and Bargarh (Orissa). Further, ACC plans to expand by 2 million tones per annum every year through internal accruals, if the demand-supply gap widens.

Boosted by a buoyant economy and large-scale infrastructure and housing projects, cement consumption has seen a nearly 50% growth in the last six years from 92 million tones in 1999-2000, to 135 million tones in 2005-06. Capacity has grown 60% from around 100 million tones in 2000 to 160 million tonnes in 2005-06.