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Systematix Research Report
ACC Ltd. reported a strong beat on all fronts due to a strong revival led by operational excellence. Revenue up by 8.4% YoY (+10.9% QoQ) to Rs 49.2 billion 7.7% higher than our estimate of Rs 45.7 billion, on the back of exceptional volume growth.
Volume up by 17.1% YoY (+9.9% QoQ) to 8.9 million tonnes per annum against our estimate of 8.1 mtpa. Blended realisation stood at Rs 5,526; a decline of 7.4% YoY; up 0.9% QoQ. Ebitda for the quarter more than doubled to Rs 9.0 billion (versus Rs 3.8 billion in Q3 FY23) against our estimate of Rs 7.4 billion aided by reduction across all cost heads.
Ebitda margin came in at 18.4%, highest in last six quarters. ACC’s various cost initiatives led to a substantial reduction in input costs. Power and fuel costs stood at Rs 1,139/tonne (-23.3%/+4.2 YoY/QoQ) which was driven by optimization of fuel mix and higher consumption of alternative fuels, while freight costs also declined - 18.4% QoQ to Rs 1,082 (-8.1% YoY).
Raw material cost/tonne and staff cost also declined 11.0% and 25.7% YoY to Rs 1,508 and Rs 200 respectively. Consequentially, blended Ebitda/tonne crossed the Rs 1,000/tonne mark after nine quarters to stand at Rs 1,015 (versus Rs 677 QoQ).
Adjusted profit after tax rose 377% YoY to Rs 5.3 billion (+37.3% QoQ). PAT margin also expanded 829 bps YoY and came in at 10.7% capacity utilization for the quarter stood at 92%.
On the back of strong result, we are raising our Ebitda estimates by 13%/12% for FY24E/FY25E and introduce FY26E financials.
We roll over our target price to FY26E which gives a new target price of Rs 3050 from earlier Rs 2,336 based on 14 times on FY26E.
We maintain 'Buy' on the stock.
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Also Read: ACC Q3 Results Review -Robust Quarter Led By Cost Reduction; Downgrade To Accumulate: Dolat Capital
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