ACC Q3 Results Review: Motilal Oswal Maintains 'Buy' On The Stock, Sees 20% Upside — Here's Why

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Motilal Oswal Report

ACC Ltd. reported lower-than-estimated operating performance (adjusted for oneoffs). While the company continued to post higher volume growth (up 20% YoY in Q3), driven by higher MSA volumes, lower realization weighed on margins.

We expect margin recovery to be gradual due to weak pricing in a few of its core markets (South and East) and slower-than-expected realization in cost savings through group synergy.

We cut our Ebitda estimates by 18%/13%/11% for FY25/FY26/FY27. We estimate a CAGR of 34%/41% for Ebitda/PAT over FY25-27, albeit on a low base. We estimate a volume CAGR of ~9% over FY25-27. Additionally, Ebitda/t is estimated to improve to Rs 690/Rs 800 in FY26/FY27 versus Rs 530 in FY25.

ACC trades inexpensively at 10 times/seven times FY26E/FY27E EV/Ebitda. We value the stock at 10x Dec’26E EV/Ebitda to arrive at our revised target price of Rs 2,400 (earlier Rs 2,680).

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