ACC margin falls to 7.05% as costs rise despite lower revenue
Consolidated net profit fell 91.69% YoY, with last year's tax benefit and higher interest magnifying the decline.
Filed 27 Oct 2026, 14:59 IST · ACC Ltd (ACC)
Key takeaways
- Consolidated operating margin fell 7.21 percentage points YoY to 7.05% as revenue declined 4.09% while expenses rose 3.97%.
- Net profit fell 91.69% YoY, with the comparison distorted by a -46.66% tax rate last year and other income equal to 29.84% of current pre-tax profit.
- ACC's 7.05% operating margin was 7.58 percentage points below the 14.63% median for 25 reported Commodities peers.
Price around the results
Costs erased operating leverage in Q2FY27
On a consolidated basis, revenue fell 4.09% YoY while expenses rose 3.97%, cutting operating profit by 52.58% and narrowing margin by 7.21 percentage points. Sequentially, revenue declined 2.05% and expenses fell only 1.18%, so operating margin contracted another 0.82 percentage points.
The margin slide has lasted four quarters
Operating margin has declined every quarter from 14.26% in Q2FY26 to 7.05% in Q2FY27, marking a fourth straight quarterly fall. ACC's current margin was 7.58 percentage points below the 14.63% median among 25 reported Commodities peers, placing it fifth from the bottom.
Reported profit reflects tax and other-income effects
The year-ago quarter carried a -46.66% tax rate, compared with 25.00% now, so the 91.69% YoY fall in net profit includes a large tax-base distortion. Other income accounted for 29.84% of current pre-tax profit, while interest costs rose 38.41% YoY and 48.15% sequentially. Sequentially, the 1.50 percentage-point decline in the tax rate provided only a limited offset.
Initial stock reaction was modest versus history
The stock rose 0.52% on the filing day, with a relative move of 0.54%. That was smaller than the 1.43% median absolute move after the past eight results, during which the stock rose three times and fell five times.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹5,689 cr | ₹5,808 cr | -2.05% | -4.09% |
| Other income | ₹37 cr | ₹31 cr | +19.35% | -83.55% |
| Expenses | ₹5,288 cr | ₹5,351 cr | -1.18% | +3.97% |
| Operating profit | ₹401 cr | ₹457 cr | -12.25% | -52.58% |
| Operating margin (%) | 7.05% | 7.87% | — | — |
| Interest | ₹40 cr | ₹27 cr | +48.15% | +38.41% |
| Depreciation | ₹274 cr | ₹261 cr | +4.98% | -1.63% |
| Profit before tax | ₹124 cr | ₹200 cr | -38.00% | -83.75% |
| Tax | ₹31 cr | ₹53 cr | -41.51% | — |
| Net profit | ₹93 cr | ₹147 cr | -36.73% | -91.69% |
| EPS (₹) | ₹4.95 | ₹7.83 | -36.78% | -91.69% |
Operating margin of 7.05% compares with a Commodities sector median of 14.63% across 25 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.52% | +0.54% |
Volume on the results session was 3.72× its 20-day average.
What to watch
- Whether operating margin holds above 7.05% after four straight quarterly declines.
- Whether expenses grow more slowly than revenue after rising 3.97% YoY against a 4.09% revenue decline.
- Whether interest-cost growth moderates from 48.15% sequentially and other income remains a material 29.84% of pre-tax profit.