ICICI Securities: ACC Q2 Improving Margin To Narrow Valuation Gap 
A worker carries a sack of cement from a truck in a warehouse (Photographer: Udit Kulshrestha/Bloomberg)

ICICI Securities: ACC Q2 Improving Margin To Narrow Valuation Gap 

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.

ICICI Securities Report

ACC Ltd’s Q2 Ebitda at Rs 5.3 billionn (down 33% YoY) with blended Ebitda/tonne at Rs 1,074 was higher than our consensus estimates mainly led by better-than-expected realisation over 10.3% QoQ and improved cost efficiencies. Cement Ebitda/tonne increased 11% YoY to Rs 1,127/tonne highest in past eight years and comparable to larger peers, with quarter exit Ebitda/tonne still higher than quarter average.

With improving margin and return ratios, ACC’s valuation gap with larger peers may narrow, in our view. Factoring-in better margin, we increase our CY20E-CY21E Ebitda by 3-11% and raise our target price to Rs 1,625 per share (earlier: Rs 1,520) based on nine times March 2022 estimate EV/E.

Click on the attachment to read the full report:

ICICI Securities ACC_Q2CY20_results.pdf


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