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Dolat Capital Report
ACC Ltd.'s Q3 FY24 reported beat on estimates, however realization in line.
ACC posted +8.3% YoY revenue to Rs 49.1 billion (plus 10.8% QoQ) led by plus 16.5% YoY in volume to 8.9 mt(plus 9.9% QoQ), which was partially offset by -4.9% YoY in realization to Rs 5,185 (plus 1.7% QoQ). Ebitda/ APAT plus 138.6%/ plus 179.6 YoY to Rs 9 billion/ Rs 5.4 billion led by better operating performance.
We expect -0.3%/ plus 26.9%/ plus 30.7% revenue/ Ebitda/ APAT compound annual growth rate over FY23- FY26E led by -7.0% (plus 16.7% on like-to-like basis)/ plus 7.0%/ plus 5.0% volume growth and -2.3%/ 0.0%/ 0.0% cement realization growth in FY24E/ FY25E/ FY26E.
We increase Ebitda estimates by 8.6%/ 10.9%/ 9.6% for FY24E/ FY25E/ FY26E factoring lower opex. Stock has run up by ~30% since our last update note (26 October 2023) leaving limited upside. Thus, we downgrade from 'Buy' to 'Accumulate' with a revised target price of Rs 2,699 based on 11 times consolidated FY26E enterprise value /Ebitda
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