2QCY17 results are ACC's best since 2QCY12. However, its costs remain one of the highest in the industry, led by legacy operations. With no capacity addition scheduled, volume growth will taper after 1HCY18, as the expansion in the East gets factored in. Valuations at 15.6/12.1x CY17/18E EV/EBITDA remain expensive, especially given low return ratios (~15% RoE/RoCE in CY18E). We remain cautious (TP: Rs 1,459, 10x June 2019 EBITDA, US112/t) ACCs numbers were inline (EBITDA/t at Rs 704/t vs estimated Rs 699/t, 7.7% YoY, 48.0% QoQ). The company witnessed double-digit volume growth (6.74 mT, 10.1% YoY) for the first time since 3QCY11, led by capacity addition in the East (4 mTPA, commissioned by 3QCY16). Strong pricing (Rs 4,509/t, 5.7% YoY, 5.7% QoQ) also aided growth, as overall costs remained flattish QoQ (Rs 3,805/t, 5.3% YoY). Other operating income surprised (Rs 1.4bn, ~2x YoY), driving the earnings beat (Rs 3.2bn, 35.3% YoY, 52.1% QoQ, est Rs 2.85bn)