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Nirmal Bang Report
ACC Ltd.'s has performed consistently over the last five quarters. Ebitda/tonne grew by ~105% YoY to Rs 1,015 in Q3 FY24 from Rs 498 in Q3 FY23. The cost levers - raw material sourcing, network optimization, sourcing of renewable energy and waste heat recovery system capacity expansion will continue to improve Ebitda/tonne over the coming quarters but at a gradual pace.
The stock has seen a sharp run-up since we recommended it in May 2023 (~44%). We believe that the near-term upside is capped and therefore we are downgrading it to 'Accumulate'.
We value it at 10.6 times December 2025E enterprise value/Ebitda with a target price of Rs 2,579.
Any significant occurrence that might have a material influence on the company's profitability will make our estimate reconsider its recommendation.
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