ACC lifts operating margin despite lower revenue, but net profit falls 61%
Lower expenses supported operating profit, while the reported pre-tax profit decline and a lower tax rate shaped the sharp fall in net profit.
Filed 24 Jul 2026, 14:51 IST · ACC Ltd (ACC)
Key takeaways
- Consolidated operating margin rose 2.17 percentage points year on year to 32.85% as expenses fell faster than revenue.
- Net profit declined 60.84% year on year because profit before tax fell 64.73%, despite a 6.64-percentage-point reduction in the tax rate.
- The stock gained 0.61% after the results, a smaller move than its 1.43% median absolute reaction over the last eight result announcements.
Price around the results
Operating margin reaches a five-quarter high
ACC's consolidated revenue fell 4.59% year on year and 18.73% sequentially, but operating profit rose 2.17% year on year. Expenses declined faster than revenue in both comparisons, lifting operating margin by 2.17 percentage points year on year and 0.36 percentage points sequentially to 32.85%. This is the fourth consecutive quarterly improvement in margin from 30.68% in Q1FY26, though the sequential gain remains modest.
Lower tax rate cushions a weak reported profit
Profit before tax fell 64.73% year on year and 46.18% sequentially, even as interest expense declined 11.33% year on year. Depreciation rose 2.52% year on year, while other income fell 22.46%; other income still represented 26.77% of profit before tax, making reported profit quality an important consideration. The tax rate fell to 26.77% from 33.41% a year earlier and 35.89% in the previous quarter, cushioning the decline in net profit.
ACC remains well above the reporting peer median
ACC's 32.85% operating margin was 19.29 percentage points above the 13.56% median for the 12 Commodities peers that had reported the same quarter. The sequential margin rise contrasts with the sharp fall in revenue, as costs contracted slightly faster than sales. Net profit nevertheless fell 38.31% sequentially, reflecting the weaker profit-before-tax outcome.
The initial market reaction was muted
The stock rose 0.61% on the results date, while its opening gap was -0.37% and its relative move versus the market was 1.04%. This was smaller than the stock's 1.43% median absolute move after its last eight results, when it rose twice and fell six times.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹5,808 cr | ₹7,146 cr | -18.73% | -4.59% |
| Other income | ₹53 cr | ₹52 cr | +1.26% | -22.46% |
| Expenses | ₹3,900 cr | ₹4,825 cr | -19.17% | -7.58% |
| Operating profit | ₹1,908 cr | ₹2,322 cr | -17.81% | +2.17% |
| Operating margin (%) | 32.85% | 32.49% | — | — |
| Interest | ₹27 cr | ₹27 cr | -0.37% | -11.33% |
| Depreciation | ₹261 cr | ₹279 cr | -6.61% | +2.52% |
| Profit before tax | ₹198 cr | ₹368 cr | -46.18% | -64.73% |
| Tax | ₹53 cr | ₹132 cr | -59.87% | -71.74% |
| Net profit | ₹147 cr | ₹238 cr | -38.31% | -60.84% |
| EPS (₹) | ₹7.83 | ₹12.69 | -38.30% | -60.83% |
Operating margin of 32.85% compares with a Commodities sector median of 13.56% across 12 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.61% | +1.04% |
Volume on the results session was 3.19× its 20-day average.
What to watch
- Whether operating margin holds above 32.85% after its 0.36-percentage-point sequential rise.
- Whether revenue recovers from the 18.73% sequential decline.
- Whether other income remains close to 26.77% of profit before tax and how that affects reported profit.