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:
This report is authored by an external party. BloombergQuint 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 brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.