ACC Q4 Results Review - Volume Growth Momentum Continues; Retain 'Buy' : Axis Securities

Axis Securities Report

ACC Ltd. reported a stellar set of numbers as its volume/ revenue/ Ebitda /adjusted profit after tax grew by 22%/13%/79%/301% YoY (above expectations), driven by better demand and lower cost. ACC Ltd. recorded an Ebitda Margin of 15.5% against 9.8% YoY (above estimates), primarily owing to the lower fuel/freight and fixed cost on a YoY basis.

ACC Ltd.'s blended Ebitda/tonne stood at Rs 805, up 46% YoY and it reported blended realisation/tonne of Rs 5,201 against Rs 5,636, down 8%/6% YoY/ QoQ. The volume for the quarter stood at 10.4 million tonnes per annum, up 22%/17% YoY/QoQ (above expectations).

Cost/tonne declined by 14% YoY to Rs 4,396 on account of better synergies, and lower fuel and freight costs. The company reported a profit of Rs 954 crore, up 301% YoY owing to higher other income, tax write-back, and exceptional items.

Outlook:

The recent establishment of a new greenfield integrated unit in Ametha (Madhya Pradesh) within a demand-strengthening central region, coupled with the acquisition of the remaining stake in Asian Concretes and Cements Pvt. Ltd., is expected to fuel higher cement demand.

This increase is supported by enhanced expenditure on infrastructure development, notably in areas such as roads, railways, affordable housing, and other initiatives.

Furthermore, improved synergies with other group entities will contribute to the company's growth trajectory in the foreseeable future. Given these factors, our outlook on the company's prospects remains positive from a medium to long-term standpoint.

Valuation and Recommendation:

The stock is currently trading at 12 times and 10.5 times FY25E/FY26E enterprise /Ebitda and EV/tonne of $ 120 and $ 115 which we believe is attractive compared to other larger peers.

We maintain our 'Buy' rating on the stock with a target price of Rs 2,900/share, implying an upside potential of 12% from the current market price.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.