HDFC Securities: ACC’s Strong Cost Controls Cushion Earnings 
A cement mixer stands at an abandoned construction site in a property development in Noida, Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

HDFC Securities: ACC’s Strong Cost Controls Cushion Earnings 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Report

ACC Ltd. delivered earnings beat as sharp reduction in fixed opex moderated the impact of Covid-19 led revenue loss. Consolidated revenue/Ebitda/APAT fell 37/33/41% YoY to Rs 26.02/5.25/2.71 billion respectively in Q2 CY20. While cement sales fell 34% YoY, Net Sales Realisation (NSR) remained flattish YoY (over 11% QoQ). A weak Q2, pulled down H1 CY20 consolidated revenue/Ebitda/APAT by 24/15/16% YoY to Rs 61.04/11.12/5.94 billion respectively.

We expect the volume decline to slow down in H2 CY20, leading to 15% volume decline in CY20. Healthy pricing, benign fuel prices, and strong cost controls should aid 4% Ebitda Compound Annual Growth Rate (CAGR) during CY19-22E (despite fall in CY20E).

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HDFC Securities ACC Results Review.pdf


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