ACC margin falls to 8.77% as costs outpace revenue growth
Management cited fuel inflation and supply constraints, while net profit fell -68.27% YoY and the stock was down -4.51% five sessions after the results.
Filed 30 Apr 2026, 17:23 IST · after market close · ACC Ltd (ACC)
Key takeaways
- Consolidated revenue grew +17.80% YoY, but expenses grew +24.51%, cutting operating margin by 4.92 percentage points.
- Operating margin fell 2.03 percentage points QoQ to 8.77%, its second straight quarterly decline and 10.00 percentage points below the 18.77% median for 51 reporting Commodities peers.
- Net profit declined -68.27% YoY as other income fell -84.74% and the tax rate rose 20.79 percentage points to 35.66%.
Price around the results
Revenue growth did not translate into operating profit
ACC's consolidated revenue rose +17.80% YoY and +10.23% QoQ, but expenses grew faster at +24.51% YoY and +12.74% QoQ. That cost mismatch reduced operating profit by -24.54% YoY and -10.50% QoQ. Net profit fell -68.27% YoY and -41.05% QoQ as the weaker operating result was compounded by lower other income and a higher tax rate.
Fuel and supply pressures drove the margin squeeze
Operating margin narrowed 4.92 percentage points YoY and 2.03 percentage points QoQ, as costs outpaced revenue in both comparisons. Interest expense rose +98.83% YoY, while the tax rate increased 20.79 percentage points YoY and 23.53 percentage points QoQ to 35.66%. Other income fell -84.74% YoY and still represented 13.61% of profit before tax, so the prior year's profit had received much greater support from non-operating income.
ACC now sits near the bottom of its reporting peer group
The 8.77% operating margin was 10.00 percentage points below the 18.77% median for 51 Commodities peers that had reported the same quarter. ACC ranked fifth from the bottom in that comparison. The margin trend also weakened after Q2FY26, falling from 14.26% to 10.80% and then 8.77% in the next two quarters.
Management flags soft demand and operating disruptions
Management said FY27 cement demand growth is expected to remain soft at about 5%. The company said the quarter was affected by fuel-cost inflation, packaging supply constraints and labour migration linked to state elections. The presentation also flags higher energy prices, higher inflation and a weaker monsoon as expected FY27 pressures.
The post-result decline was larger than ACC's usual move
The stock fell -1.68% in the initial session and -4.51% after five sessions, compared with a median absolute move of 1.19% across its eight recent result reactions. Six of those eight historical reactions were down and two were up. The five-session move also overlapped with a corporate action, so its attribution to the results is not clean.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹7,146 cr | ₹6,483 cr | +10.23% | +17.80% |
| Other income | ₹50 cr | ₹91 cr | -44.85% | -84.74% |
| Expenses | ₹6,520 cr | ₹5,783 cr | +12.74% | +24.51% |
| Operating profit | ₹627 cr | ₹700 cr | -10.50% | -24.54% |
| Operating margin (%) | 8.77% | 10.80% | — | — |
| Interest | ₹27 cr | ₹26 cr | +5.86% | +98.83% |
| Depreciation | ₹279 cr | ₹306 cr | -8.60% | +5.50% |
| Profit before tax | ₹370 cr | ₹460 cr | -19.50% | -58.02% |
| Tax | ₹132 cr | ₹56 cr | +136.58% | +0.70% |
| Net profit | ₹238 cr | ₹404 cr | -41.05% | -68.27% |
| EPS (₹) | ₹12.69 | ₹21.52 | -41.03% | -68.27% |
Operating margin of 8.77% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.68% | -2.19% |
| Next session | -2.07% | — |
| 5 sessions | -4.51% | -3.76% |
| 15 sessions | -2.80% | — |
| 30 sessions | -5.14% | — |
Volume on the results session was 2.41× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- FY27 cement demand growth is expected to remain soft at about 5%.
Problems & risks
- The quarter was affected by fuel cost inflation, packaging supply constraints and labour migration.
- Higher energy prices, higher inflation and a weaker monsoon are expected to create FY27 headwinds.
What to watch
- Whether operating margin moves back from 8.77% after the second straight quarterly decline.
- Whether fuel-cost inflation and packaging constraints continue to affect expenses after their +24.51% YoY growth.
- Management's FY27 cement-demand expectation of about 5%, alongside its comments on energy prices, inflation and the monsoon.