Gross margin fell sharply from 3.60 per cent to 0.64 per cent, reflecting one of the more crippling cement recessions in recent times.

With a capacity that is supposed to touch 12.2 million tonnes in July, ACC is claiming the number one slot in the industry. However, this is threatened for the first time by second-placed Larsen & Toubro, breathing down ACC's neck. "We are number one, we shall remain number one", ACC vice-chairman S Ganguly told a press conference in Mumbai. He even did not rule out acquisitions, saying this continues to be a `strategic objective.'

Gross turnover tumbled to Rs 2,484.73 crore from Rs 2,527.26 crore during the period, even as other income zoomed to Rs 66.13 crore from Rs 38.81 crore in the previous fiscal on account ofprofits made on sale of the slag granulation plant to Tata Steel. Even dividend and interest income was marginally lower at Rs 18.59 crore, against Rs 19.23 crore in 1996-97.

At the Bombay Stock Exchange (BSE) the ACC scrip fell sharply to Rs 1,684, down from Wednesday's close of Rs 1,738.25. During 1997-98, sales turnover at Rs 2,400 crore (of which cement contributed Rs 1,974 crore) was lower than the previous year's sales of Rs 2,469.22 crore. Net profits fell from Rs 76.92 crore to Rs 13.44 crore during the period. ACC had reported a net profit of Rs 226.78 crore during 1995-96. Total expenditure at Rs 2,256.38 crore, shot up from the previous year's level of Rs 2,240.70 crore. Interest cost increased marginally to Rs 119.14 crore, up from Rs 118.29 crore in the previous fiscal. "Last year was a very difficult one for the cement industry as price realisation dropped to unprecedented levels," Ganguly said.

Price has been sluggish during the previous fiscal, as Indian industry went ahead with massivecapacity additions of over 14 million tonnes. For ACC, prices were down 4 per cent between April-September 1997, and realisation were down further to 9 per cent in the period between September 1997 to March 1998.

"During the year, ACC's average price realisation fell by 7 per cent, which resulted in a loss of income of close to Rs 100 crore," Ganguly said. The company has taken up drastic cost-control measures on a war footing, he added. Its cement business suffered `grievously' during the second half of the year due to unremunerative prices.

Profit before interest, depreciation and tax (PBIDT) at Rs 220.09 crore was 20 per cent lower than the previous year's figure of RS 286.56 crore. Even gross profit after interest but before depreciation declined from Rs 168.27 crore to Rs 100.95 crore during the period. The company provided for a depreciation of Rs 85.51 crore during the year, against Rs 79.35 crore in the previous fiscal. Profit before tax slipped to Rs 15.44 crore during the year, down from Rs88.92 crore during 1996-97. Its tax outgo during 1997-98 was lower at Rs 2 crore, against Rs 12 crore in the previous year.