ACC Q2 Results Review - Expected To Maintain Balanced Growth: Nirmal Bang

Nirmal Bang Report

ACC Ltd.'s overall revenue for Q2 FY24 exceeded our estimate by 11% (actual/estimated: Rs 44,347 million/Rs 41,110 million) on the back of reported volume (cement plus clinker) growth of 17% YoY (actual/estimated: 8.1 million tonne/7.3 million tonne).

Overall Ebitda increased significantly on YoY basis on a low base but was lower than our estimate by 15% (actual/estimated: Rs 5,484 million/Rs 6,484 million) due to lower cost for power and fuel (declined by 33% YoY), labour and other expenses. Raw material expenses/tonne increased by ~30% YoY.

We expect many levers of growth to emerge along with cost savings (Rs 170-220/tonne) in terms of raw material sourcing, network optimisation, sourcing of renewable energy and waste heat recovery systems capacity expansion. The key markets serviced by legacy plants shall be replaced/supported by additional clinker line.

We maintain our 'Buy' rating and value ACC at an unchanged valuation of 10.6 times September 2025E enterprise value/Ebitda with a revised target price of Rs 2,495.

Click on the attachment to read the full report: 

DISCLAIMER

This report is authored by an external party. BQ Prime 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 BQ Prime.

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