Swiss cement maker Holcim Ltd.'s (HOLN.VX) two Indian units Thursday posted a drop in net profit for the first quarter as they booked higher depreciation charges for their power plants due to changes in accounting rules.

Ambuja Cements Ltd. (500425.BY) reported a 23% fall in net profit for the January-March period to INR3.12 billion, while ACC Ltd. (500410.BY) said consolidated net profit slumped 57% from a year earlier to INR1.52 billion.

ACC recorded a depreciation charge of INR3.35 billion, and Ambuja took a one-time hit of INR2.79 billion.

Both companies missed analysts' estimates. The average of estimates from six analysts polled by Dow Jones Newswires had forecast a net profit of INR4.0 billion for ACC and INR4.43 billion for Ambuja.

These estimates didn't factor in the one-time charges.

The January-March quarter has been good for Indian cement companies as sales volume of the building material has risen thanks to a revival in demand from the construction sector. Prices have also been raised, largely to offset higher cost of production and transportation.

Sales at both ACC and Ambuja rose 19% each to INR30.15 billion and INR26.33 billion, respectively.

ACC's cement sales volume grew 9% to 6.72 million tons, while Ambuja's rose 10% to 6.05 million tons.

Total costs at ACC increased 20% to INR25.35 billion, which the company blamed on a steep increase in the price of raw materials such as coal, fly ash and gypsum. ACC said that a hike in rail freight costs and higher fuel prices have made it costlier to transport cement from its factories.

Ambuja's total costs climbed 18% to INR20.09 billion. The company said that higher cost is expected to keep pressuring its profit margin in the near term.

- By Prasenjit Bhattacharya, Dow Jones Newswires; 91-11-4356-3358; prasenjit.bhattacharya@dowjones.com