ACC Q4 Results Review - Improvement To Be Led By Cost Reduction: Dolat Capital

Dolat Capital Report

ACC Ltd. reported beat on volume/revenue/Ebitda, however Ebitda/tonne and adjusted profit after tax were in-line; realisation/tn was below estimates. Revenue grew by 12.9% YoY to Rs 54.1 billion (+10.1% QoQ), led by volume growth of +23.5% YoY to 10.4 milliot (+17.3% QoQ) partially offset by -7.4% YoY in realisation to Rs 4,874 (+6.0% QoQ).

Ebitda/adjusted profit after tax were up by 78.6%/51.6% YoY to Rs 8.4 billion/Rs 4.6 billion, led by better operating performance.

We expect revenue/Ebitda/adjusted profit after tax compound annual growth rate of 5.1%/17.0%/15.8% over FY24- 26E, led by +6.2%/+6.4% volume growth and -2.5%/+1.0% cement realisation growth in FY25E/FY26E.

ACC, in our view, will also be a key beneficiary of group synergies in cost reduction and thereby result in aiding overall profitability.

We maintain our Ebitda estimates for FY25E, but increase estimates by 6.5% for FY26E post factoring lower opex. Maintain ‘Accumulate’ rating on the stock with revised target price of Rs 2,765 based on 11 times consolidated FY26E EV/Ebitda.

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