ACC Q3 Review — Systematix Maintains 'Buy', Says Robust Volume Growth, Cost Efficiencies Drives Optimism

ACC has strengthened its market presence through its leadership in green blended cement, an expanding portfolio of premium products, and improved rail-to-road logistics optimization..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.ACC Ltd.’s numbers were a positive surprise as revenue/Ebitda/PAT exceeded our estimates due to the effect of government incentive accruals (Rs 7 billion). The company clocked an Ebitda/tonne at Rs 1,037 led by Adani group's thrust on cost excellence. Standalone Revenue was up 19.9% YoY (+28% QoQ) to Rs 59 billion which was in line with our estimates barring the one-off incentive benefit. Volume was up by a strong 20.2% YoY (+15.1% QoQ) to 10.7 mtpa against our estimate of 10.2 mtpa. Blended realisation remained flattish YoY and stood at Rs 5,510/tonne; a rise of 11.2% QoQ. Ebitda for the quarter rose 22.8% to Rs.11.1 billion versus our estimate of Rs 6.4 billion. Ebitda margin stood at 18.8% (versus 18.4% in Q3 FY24). Ebitda/tonne rose 2.2% YoY and surged 124% QoQ to Rs 1,037/tn. Power and fuel cost fell 31% YoY to a multi-year low of Rs 786/tn due to use of low cost imported petcoke, improved linkage and captive coal consumption. Adjusted PAT more than doubled to Rs 10.9 billion (versus Rs 5.3 billion in Q3 FY24) broadly in line with our estimates barring the one-off incentive effect. The captive coal usage, along with synergies with group companies, have led to a 10% decrease in kiln fuel costs. Additionally, the thermal value has decreased from 739 kCal to 732 kCal, with further improvements expected in the upcoming quarters. Freight costs also declined 10.2% YoY to Rs 971. Green power and AFR consumption as a share of total power mix stood at 18.7% and 9.6% in Q3 FY25. Kiln fuel cost improved from Rs 1.86 per KCal to Rs.1.68 per Kcal. We factor a 9.0%/10.6%/13.6% volume/revenue/Ebitda CAGR over FY24-FY26E. We keep our estimates unchanged with a target price of Rs 2,701 based on 12x FY26E EV/Ebitda, factoring the risk of prevailing weak demand and price conditions. We maintain Buy on the stock..Click on the attachment to read the full report:.ACC Q3 Results: Profit More Than Doubles.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ACC Q3 Review — Systematix Maintains 'Buy', Says Robust Volume Growth, Cost Efficiencies Drives Optimism

ACC clocked an Ebitda/tonne at Rs 1,037 led by Adani group's thrust on cost excellence, adds the brokerage.

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